Rightly said! Gold has been treasured since pre-historic times around the world and investing in gold seems to be the best alternative in the current market instability. As a novice here it can be well confusing and daunting to invest your money wisely. This article is intended to portray the real world of bullion trading and attempts to explain how to go about finding the right coin for you.
Let us start analyzing why there is all this hype about Gold.
- Gold is durable; it doesn’t tarnish as years pass.
- Gold is universally accepted.
- Gold retains and appreciates in value.
- Gold is available in a standardized form.
- Gold is tangible and hence can be safeguarded easily.
As an ultimate form of safe haven investment, gold is considered to be a great asset and worth while investment. With so much uncertainty lurking over our economic growth it is a prudent thought, having chosen gold to hedge our investments.
Beginners who wish to invest in this market must watch out for 3 foremost factors:
- right coins to invest
- right coin dealers
- right coin storage
With almost 45 mints available worldwide, the most sensible option for a beginner would be to go for the American Gold Eagle, as it is cast ironed by the U.S mint. A good dealer would be a veteran in this field. Before choosing traders for your investment always make sure to study his experience and go for the most reputable ones. Last but not least, safekeeping your asset should be equally weighed with the other two factors. Investors can go for a personal safe box or even bank vaults. As long as it is safe, you can rest easy.
Gold Investment options:
With the rising prices in gold, investors can choose from varied options, either directly through ownership or indirectly through stocks, accounts etc. for their investments. Below are some of the most widely used methods.
1. Gold coins & Bars
Purchasing gold coins or Bars is the most popular and conventional method of investment. Financial experts promote buying gold coins or bars as it balance risks & combats inflation. Purchase of gold depends on how much you can afford and what you need to buy. Another advantage of investing in coins / bars is the ease of storage; they are universally recognized and hence can be bought and sold with no trouble; they are widely available through dealers and mints. Beginners should always be careful against buying fraudulent gold from unknown suppliers. Usually a little premium needs to be paid, which makes it a little expensive initially. American Gold eagle, American Gold buffalo are some of the popular yellow coins available.
2. Exchange Traded Funds
Gold Exchange Trade Funds (GETFs) are shares which track the price of the gold. They are traded on major stock exchanges in New York, Paris, Mumbai etc. Typically a small commission fee, along with a yearly storage fee applies. Trading through GETFs can be carried out easily. While some ETFs invest in gold related companies' stock, some actually invest in the real gold. One of the drawbacks in this method is, as opposed to gold coins or bars, all we have in our hand is paper documents which do not actually give the feeling of real gold in your hands. A similar idea holds for Gold Mutual Funds as well.
3. Certificates
Like ETF, gold certificates are also paper documents which gives ownership to investors rather than storing the actual bullion. This allows investors to buy and sell the gold without thinking about the overhead of transferring and storing.
4. Gold Savings Accounts
Similar to our normal savings account, an investor can credit his account as gold is deposited and withdrawal can be made either in the form of Gold coins or currency equivalents. Digital Gold currency accounts or Bullion vault gold exchange work on a similar principle.
5. Buying gold jewelry & ornaments is another investment option available.
Whether you want to invest in gold coins, bars or other options the basic ground will be to get sound and reliable investment advice. But whatever your choice, as a conservative option, gold is considered to be one of the best investments for the future.
