Common Ways How People Invest in Gold

by Gil on September 6, 2016

Some investors say that gold is one of the safest investments in the world today because it is not affected by the stock market and other economic forces. Even in ancient time, gold is the most valuable possession of the kingdoms all over the world.

Gold is one of the best choices for those that want to invest some of their money other than stock market and real estate. One reason why gold is a best option is that gold price tend to increase over time.

However, investing in gold may not turn out to be as simple as it sounds and it may not be available in some of the countries. In spite of this, there are several options on how people can invest in gold which you can see in the following section.

gold bar

Investing in Physical Gold

First of all, some people invest in physical gold like gold coins, jewelries and gold bars. In the US and other developed countries, gold coins can be bought in banks.

In this option, people can invest their money in gold by direct ownership. Perhaps, this is common choice for those  people planning to buy gold. By owning gold bars and coins, some investors don’t worry about the price being influenced by the government. The only thing that will affect how gold price fluctuates is the demand and supply of the commodity.

Nonetheless, people cannot expect a fast profit by purchasing gold bars. Instead, even though they will have to buy in retail, they will have to sell their gold bars in wholesale to gain the profits they may have expected. But that should not be too much of a problem. Anyway, gold has a better financial value when it is treated as a defensive rather than a speculative asset.

Gold Mutual Funds

Investing in the gold mutual funds is the next way people can invest their money in gold. This is usually the best option for those who do not really want to buy the physical gold but still desire the financial value it offer.

Here, you will buy mutual fund companies that are investing their money in gold. There are many mutual funds that you can choose particularly in the US so it won’t be a big problem on how to select one.

Gold Stocks

Gold stock is the next choice people can venture. However, this one is rather speculative. The reason is because  it may have the potential to offer higher profits but it also gives investors a greater risk of losing their money. With that being said, gold stock is often suitable to those investors with quite a high risk tolerance level.

gold coins

Gold ETF

Investors can also invest in gold ETF (Exchange Traded Funds). In this case, the investors will not purchase the gold bars physically. What they will be purchasing instead is a particular quantity of asset, yet this asset is backed by the commodity of gold. In this way, the investors won’t have to worry about a company going bad in business. They only have to pay attention to the fluctuation of the gold price.

Gold Options and Futures

The last way on how to invest in gold is gold options and futures. Nonetheless, this option is only suitable for those investors that have had some experiences in the world of gold investment. This is because they will often have to speculate possible gold prices to show up. In the options market, for example, they will have to speculate how the gold price may move in either direction. Therefore, investing in gold options and futures require long experience and deep knowledge on the in and out of gold investing.

How about you? Do you have some of the gold investments mentioned above? What do yo think is the best option if someone wants to invest some of their money in gold? Can you share your experience? Thanks!


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