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Gold has long been a store of value, but the idea of it as an investment can seem daunting. If you would like to include gold in your investment portfolio, you can choose several smart choices, each of which offers different characteristics. Below, we go through just some of the ways you can invest in gold wisely.
1. Physical Bullion
For many investors, there’s just no alternative to having physical gold in your possession. There are a wide range of gold bars and coins available from dealers such as City Gold Bullion where you have the option to safely buy gold bullion online. One big advantage of physical gold is that you are able to own it directly. There is no need for an intermediary between you or your investment. Don’t forget, you will need to afford a secure way to store your precious metal.
2. Exchange Traded Funds
Also known as ETFs, these investments usually offer more liquidity. Some trusts have shares that represent a little less than a tenth of an ounce of gold. The gold exchange traded funds own and store physical gold, acting as support for the value of your ETF shares.
The benefit of investing in ETFs is that you can buy or sell your shares whenever the stock market is open and transaction costs tend to be lower than with gold bullion.
3. Gold Futures Contracts
If you would prefer to have control over a great deal of gold, futures contracts are the perfect low-cost alternative. To open a position, you only need a smaller initial margin investment and you will need to maintain a minimum margin level.
Margin tends to offer good leverage for investors.
4. Gold Mining Stocks
Gold mining stocks are active businesses and while their prospects may be linked to gold prices, mining companies are known to rise when they have successful operations. Also, mining stocks tend to go up more sharply than gold when prices rise.
5. Gold Streaming Companies
One hybrid way for you to invest in gold is to purchase shares of gold streaming companies. The companies don’t actually mine gold but provide financing to the mining companies in exchange for a share of gold production.
The advantage of investing in gold streaming companies is that they have good exposure to gold prices and get a stream of income from the financing arrangements.
There are plenty of ways to invest in gold, but the right way for you will depend on your investment goals. By understanding the differences between the above popular types of gold investments, you will be better able to invest wisely and find the perfect way for your circumstances.
Remember, if you want to invest in physical gold bars or coins, you will need to account for a safe way to store the physical bullion, which can sometimes be costly. Also, remember to take both your long-term and short-term investment goals into consideration before you choose the right investment method for you and your requirements.