It is necessary to know the best way to invest in gold if you want to include this precious metal in your portfolio. Gold has traditionally been regarded as the best store of value and the most effective hedge against inflation and the falling value of different currencies. As a result, investors always like to include at least some amount of gold in their portfolio. How much to include will depend on a number of factors but it is recommended that not more than 10% is invested in gold. It is best to let professional fund managers to invest in gold on your behalf. But if you want to do it yourself, you should educate yourself thoroughly about how to invest in gold.
How to choose the best way to invest in gold
There are different ways to invest in gold. Each has its own advantages and disadvantages.
One of the best ways to invest in gold is to buy gold bars and coins. These are known as gold bullion. The gold bars are rectangular in shape and are available in different sizes. You should be careful when buying them because they are not completely free from fraud. If you buy bars, you will have to transport and store them and pay insurance, but you will always have a solid asset at your disposal. Gold coins are another popular form of investment, but you will need to know about the collector’s value and intrinsic value to invest successfully in gold coins.
Another alternative way is to buy gold certificates. Your certificate should be issued by a bank and bear the number of the gold bar against which it is issued. You do not have to worry about the security issue.
You can buy Exchange Traded Products in gold. You gain easy access to the gold market while avoiding the risks of physical storage.
Apart from these, you can invest in gold derivatives like futures and shares, or you can buy shares in a gold mining company. These are much more risky ventures and should be left to professional traders.
There are risks and benefits associated with gold investment. While it is a best store of value, the price of gold is so high that it is mostly beyond the reach of the ordinary investor. The amount circulated in the market is also quite small.
Which is the best way to invest in gold?
It is difficult to choose which of the above, is the best way to invest in gold. Many people prefer to physically possess gold bars because they are safe and the best store of value. Others prefer gold certificates because you avoid problems related to storage and safety, but they are paper assets which can be rendered valueless at a turn of geopolitical event.
Buying shares in mining companies are lucrative but highly speculative. So the best way to invest in gold for you depends up on your purpose of the investment. For saving and storing of value gold bullion and certificates are best, but if you want growth, you can consider gold futures and options.