Investing In Gold: How To Do It And What Are The Benefits
Gold is considered a safe haven for investors. For one, many currencies are backed up by gold. When the value of the U.S. dollar falls, the price of gold will rise; its value has an inverse relationship with the U.S. dollar.
From this simple knowledge of the relationship of dollar and gold, it gives you a glimpse of the investment value of Gold.
If you want to start investing in gold, thankfully, it’s easy to buy and sell gold, and it’s also acceptable anywhere in the world.
Along with its benefits, here are some ways on how to invest in gold :
1. Acquire or Buy Gold Bars or Bullion
One of the ways to invest in gold is to physically buy gold in bar or bullion form. Source your gold from a reliable source so that you’ll be sure that it’s indeed pure gold. The popular gold bar has a marking of 999, which means that it's 99.9% pure gold.
The benefit of holding on to a gold bar is that it’s the same as carrying money – it’s portable. You can sell it anytime without any hassle.
Additionally, when a country is in a political crisis and people will take refuge in other countries, gold can be exchanged for the other countries’ currency. Everybody is willing to buy your gold. In this way, gold can be considered as universal money; it’s accepted all over the world.
2. Stock Market
There are gold mining companies listed in the stock market. Owning the shares of stocks of the gold mining companies is an indirect way of investing in gold.
The benefit of holding gold mining company stocks is that you can trade it online. You can acquire the shares of stocks from the stockbroker. This way, you don’t have to bring the gold out of your house to buy or sell it since the trading is done online.
When you sell, the money is directly transferred to your account. Hence, what you only need to do is just monitor the performance of the mining company and the prices of gold in the market .
Another form of gold investment is to buy gold pieces of jewelry. Gold rings, gold pendant, gold necklaces, or gold earrings are some of the items that you can have.
The benefit of this method is that you can wear them and enjoy them while you’re still the owner. In addition to this, the design of the jewelry will give a premium to the price, especially if it’s unique or it was crafted by a well-known designer.
4. Gold Certificate
A gold certificate is a document that guarantees the owner of the amount of gold that’s kept by the issuer. This way, the owner doesn’t have to physically buy gold bullion and transport it in a safe place. Thus, owning a gold certificate makes it very convenient to own gold.
This saves a lot of effort during the buying and selling of gold. There are banks and companies that hold precious metals, including gold issued gold certificates. The owner can trade the gold certificate to these banks and companies.
Acquiring gold bullion or gold bar is the safest investment amongst the four types of investment since the gold is physically in your possession.
Investing in a mining company in the stock market is risky because the value of your stock will depend on the quality of officers who manage the company, which you have no control over. Owning a gold certificate also has the same risk as investing in the gold mining company in the stock market.
If the issuing bank or company of the gold certificate goes out of business, the value of your gold certificate becomes zero – your money goes down the drain.
Owning jewelry is the next safest investment. As mentioned, at least you can wear your jewelry and relish its beauty while it’s in your possession.
Gold is considered an asset that doesn’t depreciate in value over time. You can simply sell it when you get bored of it or you want to get new ones.
Since gold’s value appreciates over several years, it’s considered as a long-term investment. Usually, people keep their gold in the vault to serve as security. This will protect you from economic and political uncertainties.
Investing in gold will somewhat bail you out from sudden financial turmoil. That’s why it’s also advisable to set your investment in gold at 10% of your portfolio.