An investment in gold can provide some peace of mind during times of economic turmoil, something we could see in the near future. Many small investors are attracted by the security gold provides, but just don’t know how to start gold investing. The truth, however, is that it is not as complicated as one might think. All you have to do make a couple of simple decisions and you are on your way to profitable gold investment.
The first decision you must make is how much of your portfolio or savings you can afford to use for gold investing. Look into the near future and ask yourself how much of your savings will you need in case of emergencies or other circumstances that might pop up. You should invest only that which you will not need in the near future.
Once you have decided how much you are able to invest, you have two options for starting gold investing.
Also called paper gold, investing in gold shares is similar to buying stock on the stock market. You set up a brokerage account with a gold exchange traded fund and manage it as you would a stock.
Although this can be the easiest and fastest way to invest in gold, it is not desirable to many investors because it defeats the purpose for which one starts gold investing. For many, the lure of a gold investment is having a physical piece of universally recognized currency that will still have value in the case of market failure or fiat money devaluation.
An investment in paper gold is intrinsically the same as buying stock in a company or commodity and is subject to the whims of the financial market.
Investors must also beware of paper gold scams, which are becoming more and more popular these days. In these scams, companies simply lie to investors, claiming to have large stockpiles of gold that don’t really exist.
If you want a tangible, safe investment there is no better choice than an investment in the physical element itself, or what is known as gold bullion. You can store your investment in a personal safe at home or in a safety deposit box at your preferred bank. There is, of course, the risk of theft, but if you have a secure way of storing the gold, this becomes a nonissue.
Here again, investors are faced with a couple of options when they start gold investing. Gold bullion is sold in two forms: gold bars and gold coins. It is recommended that small investors deal in coins, for they are more liquid than bars. For example, it is easier to sell multiple 1 oz. coins to multiple buyers than it is for a small investor to find a buyer for a large gold bar that weighs a kilogram.
Gold bars have low premiums because they are not rare collector’s items. They are valued for their weight and purity and therefore trade for very close to the gold spot price.
Some gold coins are traded in much the same way as gold bars, in that their price is determined by their weight and purity. Many novice gold investors tend to think that all gold coins are rare collector’s items and that they carry huge premiums, but this is not the case with every gold coin. Governments the world over mint millions of gold coins a year that are not collector’s items and trade for very close to the spot price.
Gold coins are divided into two categories: modern gold coins and pre-1933 certified rare gold coins. The latter obviously carry premiums that vary depending on the coin, but they have a benefit that modern gold coins don’t. They cannot be confiscated by the government in times of economic crisis (a problem that we, unfortunately, could face in the near future).
Gold coins, both modern and rare, are an excellent way to start gold investing.
So there you have it. Now you know how to start gold investing. It’s really very simple. You just have to know what you want, and know someone who can help you make the investment of your liking.
If you decide to start your investments by purchasing gold coins, Certified Gold Exchange can facilitate a coin buy that is perfect for your financial situation. Feel free to contact us at 1-800-300-0715 and start gold investing today.
Recommended for you: Gold IRA Rollover Guide and Silver Investments.
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