Since time immemorial, gold has been the standard by which wealth has been measured. Those with gold are afforded great comfort and stability that those without can only aspire to. The same rings true today as many investors find gold to be the most dependable source of investment out there.
Profiting from this rare and shiny metal isn’t reserved for the wealthy or political powerful only though. Anyone with ample funds can profit from gold too — and it won’t cost an arm and a leg. In this article, we’ll look into some everyday ways an investor like you can make a pretty penny with this precious metal…
We’ll start with the best investment option first. Gold investment retirement accounts, or IRAs, are exactly what they sound like. They are retirement funds put directly into physical gold. This self-directed account uses the fact that gold is only getting rarer and rare — and more expensive as a result — to counteract the effects of inflation.
Where other forms of investment often devaluate with inflation, the fact that gold’s value only increases means that adding this form of investment to your portfolio can act as an insurance policy against inflation’s effects. On top of that, the recent shift of the financial market towards gold makes Gold IRAs such as Goldco or Regal Assets all the more available and easier to apply for.
Gold bullions can take the form of either gold bars or gold coins. They are usually gold that is owned directly. This traditional form of gold investment is still quite viable as an easier and more available source of funds. Many who also invest in gold directly do so to have something to serve them in times of emergencies or the unlikely scenario of an economic collapse (where printed no longer holds value).
Many have the idea that gold bullions resemble the large bars seen on TV or in documentaries. Investors prefer their gold bars a lot smaller in size or the form of gold coins. This is for convenience’s sake as smaller bars are easier to handle and liquidate individually as needed.
Owning gold outright can make it easier to track the return on your investment and is generally quite easy to convert to cash. That being said, owning gold also comes with the added cost of secure storage and insurance. You will also have to deal with markups from the dealers which hinders profits or places pressure on yourself to haggle.
Often with the case of Gold Coinage, you are more likely to earn from them as collector’s items rather than their worth as pieces of gold. This means that the gold coinage, especially rare and/or old ones, can be worth more investment-wise but are harder to acquire and appraise.
Gold Exchange Traded Funds (ETFs)
A lot safer than owning gold outright, Gold ETFs is a form of investment wherein you buy stocks that give you partial ownership of a fixed amount of gold and at a fixed price. This means you can essentially own gold without having to store it or pay for insurance.
ETFs can be found being sold at most brokerages. The fees involved in ETFs are considerably lower than in other gold-centered investments which makes them ideal for small-time investors or those looking to earn passive income during retirement.
Gold Mutual Funds
In the simplest of terms, a mutual fund is when investors pool their funds together and have it controlled under single management that gives them a dividend of the profits. Gold mutual funds work the same, but the managing firm’s investments are in gold or gold-related companies. This can be in physically owning gold or investing in the stocks of gold mining companies.
Like ETFs, gold mutual funds are easy to handle and require less capital than other more advanced modes of investment. Their low costs might also mean lower than expected dividends — keep this in mind as a long-term investment option rather than something that can serve as a cash cow.
Gold Futures and Options
A gold futures contract is a contract to buy or sell gold at a future time and a predetermined weight and amount. Unlike buying gold or gold stocks, contracts are what’s bought and sold with this form of gold investment. These are more suited for experienced investors who are looking for a higher-paying investment with minimal cost.
On the other hand, options are different because they give the owner the right to buy future contracts within a pre-set time frame and a pre-set price. Investors do this to leverage the original investment as well as mitigate any losses on the price paid.
Both forms of investment are usually supposed to be done by more experienced investors willing to take risks. The intricate nature of contracts alone requires a lot of research and attention in order to fully grasp. Otherwise, it might all come across as nothing but jargon to the newbie.
There are other forms of investment to know about when learning how to invest in gold. Though not considered actual investments in the commodity of gold, they can be the next best thing:
Gold Mining Companies
Despite the current situation the world finds itself in, there is something to be said by the continuous profits and revenue growth being reported by gold mining companies. Buying the stocks of companies that explore for and mine for gold benefits you as much as it does the company. Especially now that the price of gold has only been increasing since the last few decades.
Though jewelry can be quite valuable, they are not recommended as a gold source. This is due to the high markups and the fact that the gold contained in many jewelries is simply not pure enough.
And those were all the ways to invest in gold. We highly recommend IRAs as the method of gold investment for their sheer simplicity and ease of transaction. Its long-term benefits also mean added security for you in the later years. Finally, due diligence is key with any investment. Proper research and caution are essential where your hard-earned money is involved. Take time to learn all you can. If you keep all this in mind, then your future is certainly going to be as bright as gold.