Investing money can be one of the most difficult things to do because everything can have a risk. Not to mention, you’re putting your hard-earned money into something expecting your money to be safe from inflation, get you good returns when you cash out, or generate income for you.
Fortunately, gold is seen as a safe haven by a lot of investors. But, there are many different types of gold investments. And like every investment, you need to figure out the risks of each type of gold investment before putting any money into it.
Understand Before Investing
Before you put any money into any of the three following types of gold investments, you should thoroughly research the one you like.
If you can’t seem to understand from the resources online or they don’t relate to your location or situation, then you can always find an advisor to help you understand the options and help you invest as well.
If you’re looking to start off with a simple or less complicated gold investment, then you can start with the first. But, every one of them has its pros and cons.
Buy Physical Gold
The easiest way to invest in gold is to actually buy physical gold yourself. Many investors like to buy physical gold because they can easily find a gold buyer and get cash immediately whenever they want.
This option can be seen as highly liquid.
A term known as gold bullion is used for investment-grade gold. Gold bullion refers to gold coins, bars, or ingots. These are called investment grade because gold bullion is at least 99.5 percent pure. Depending on how much you’re willing to invest, you can buy it in different sizes to reflect the different weights.
You can also buy gold jewelry, but then you will have to pay for the making or crafting charges that you can’t normally recover when selling.
Invest In Gold ETFs
If you don’t want to deal with the trouble of owning physical gold, then you can look into gold ETFs.
A gold exchange-traded fund or ETF is a fund that holds a range of investments backed by physical gold, mimics the price movements of physical gold, holds shares in gold miners, or invests in gold-backed derivatives.
Since there is a lot of range here, you need to have an understanding of the primary factors that dictate the performance of the ETFs.
Because ETFs are traded easily like stocks, they are quite liquid as well and can also be cheaper for beginner investors. However, you will need to spend some time understanding them.
Put Money in Gold Mining Stocks
Another way to invest in gold without having physical gold is to put money into companies that mine gold. The basic idea is that the price of the gold mining company’s stocks will follow the trend in gold prices.
However, the pricing in stocks will also depend on the company’s practices, mines, and the people who run it, among other things. Investing in gold mining stocks is somewhat similar to investing in other companies, as you still have to thoroughly understand the company before investing in it.