Whether you are looking to diversify your portfolio, protect yourself and your investments from a high inflation rate, or need to lower your investment risks, investing in gold is a great option. Gold performs very well, especially when used as a long-term investment option. If you do not have any gold in your portfolio, this guide will show you how to get started in gold investing.
The Basics
As with all other commodities, the price of gold is determined by supply and demand. Gold is mined in various areas around the world including in China, Australia, United States and Russia. The best time to buy gold is when a recession, geopolitical tensions, political instability, inflation and currency depreciation are expected. This is because the price of gold increases during these times and you stand to make a great return on your investment when you do this. To get started with gold investing, you need to know the various ways you can do so.
Buying Physical Gold
There are lots of different ways to invest in physical gold. You can purchase bullion, gold bars or coins from different sellers. If you are looking for pure gold nuggets, you can also purchase NBG gold nuggets from gold sellers like Nuggets by Grant. Just remember to choose a reputable gold seller as they will likely sell you the purest gold at little markup.
Gold Certificates
If you do not want to own physical gold, you can always purchase gold certificates. These certificates are notes that are sold by companies that own gold. In most cases, there is no specific gold associated with the certificates bought, but the company issuing the certificates has enough gold to pay out all certificates in the future.
Buying Mining Stocks
Another great way to invest in gold without owning physical gold or taking on the risks associated with gold certificates is purchasing gold mining stocks. The price of mining stocks usually matches the price of the commodity in the market and because mining companies can increase capacity, investors get to benefit from the increase in production. Before investing in mining stocks, ensure that you check the mining company out first. This is because these stocks can perform better or worse than gold depending on the specific miner you bought the gold from.
Investing in ETFs
Mining-focused ETFs are a great way to invest in gold while diversifying your portfolio at the same time. These ETFs include other metals. When purchasing a mining-focused ETF, ensure that you check how it is weighted, constructed and rebalanced. If you do not do this, you might end up with an ETF that leads to too much exposure even when the price of gold – which is just one part of your ETF – is soaring.
Investing in gold is a great way to build a diversified portfolio while lowering your overall risk and exposure. Because there are so many ways that you can invest in gold, and each of the different ways to invest in gold has its pros and cons, it pays to do your research first.