- 30 Jun 2021
- Precious Metals
- Comments: 0
For many years now, human beings have considered gold an excellent store of value and an investment. But, sometimes, the market may be volatile, or the economy is at its worst state.
Still, you’ll hear many investors ask, “Is investing in gold profitable?” and “Can I start my gold investment plan?”
If you’re thinking of investing in gold, seeking gold investment advice should be the first place to start. Besides, you need to review your investment goals and long-term investment strategy.
Ultimately, ensure the precious metal you choose is a perfect fit for your portfolio.
Typically, gold investment advice involves informing you precisely what precious metal you should buy from whom. It also talks about when to buy it. And how much to spend without considering your particular needs, requirements, and situations.
Regardless of the subject, every sales pitch's plan is to part with their cash to reap the benefits of a salesperson. When communicating with someone on a specific topic that you don't understand, it may sometimes be tricky to counter whatever they say.
Even if you think you’re far away from getting wealthy, there’s always a better way to invest and benefit. That’s why you need to have proper tools at your disposal for making your gold investment journey successful.
You Are the Best Asset
They are understanding more about yourself as a prospective investor is your best and powerful tool. You know your circumstances, and therefore you're an expert of yourself. Salespersons always strive to convince you that your actual needs will more often get solved by their solutions.
A good example is the financial advisers. They boast a set of commodities they desire to push onto you, and they'll find out one to fit.
Therefore, the intimate knowledge about yourself as an investor matters a lot. It allows you to control the way and angle our gold investment advice will suit your circumstance and needs best. All you need is to learn how best to get the correct results.
Below, you can easily spot what feels like the best strategy to adopt. Plus, you'll know what to consider before investing in precious metals.
This essential gold investment advice comes in handy for any novice looking to invest in gold assets. By reading it to the end, you’ll be in a perfect position to tell the best direction to take. And, more importantly, know how to achieve success.
Why Should You Invest in Gold?
You should first know what your reasons for investing in gold are. Gold is amongst the oldest traded assets. It has been in the business long before the stock and bond markets came into existence.
For that reason, the following are some reasons why one can consider gold as a good investment. They include:
1. Preserving Wealth
Gold has successfully helped store and preserve wealth for thousands of generations. That's why many investors trust it, and also its importance is recognized in the modern economy. As a result, gold stands out even the paper-dominated currencies.
Consider this example:
In the 1970s, an ounce of gold was worth $35. At this time, you could choose to own an ounce of gold or keep the $35. The two could buy similar items such as a fancy bicycle or a new business suit.
But, today, you can convert an ounce of gold to current prices and still be sufficient to buy a new suit. That’s not the same case as with the $35 paper currency.
Gold's value has since increased over the years. This means that the value of gold is much higher than the initial $35 investment. However, the $35 note dollar has not increased in value due to inflation. So, it can't buy as many things as it could have back in the 1970s.
2. Hedge Against Inflation
The wealth preservation abilities of gold make it even more important in our today's economy. That's mainly where the investors face the declining value of the U.S. dollar and looming inflation.
Gold has historically played as a hedge against these scenarios. As a result, its value often appreciates as inflation rates increases while the dollar is depreciating.
If investors notice that their money's value is reducing, they'll opt for a precious metal that has maintained its value for a long. The 1970s are a great example of a time when gold prices were increasing as inflation increased.
But why? Well, gold’s value is often measured and priced in terms of U.S. dollars across the world. So if you want to buy gold, then the central banks need to sell their U.S. dollars.
Besides that, a dollar that’s falling in value makes gold a cheaper investment for individuals looking to hold other currencies. This leads to increased demand from investors with money that has increased in value to the U.S. dollar.
3. Safe Haven
Our modern economic environment is full of uncertainties involving political and economic issues. Therefore, investors see gold as a safe haven in such times.
Why is that so? Well, history reveals to us plenty of political coups, failing empires, and currencies. In such times, many gold investors managed to safeguard their wealth.
At some points, they could use the asset to evade all the havoc. As a result, every time there is worldwide economic uncertainty, investors will always prefer buying gold as a safe refuge.
That's because gold is not quickly or directly affected by any form of economic or political forces. As a result, unlike modern currencies, gold cannot get printed to help regulate its demand and supply levels.
Gold exists as a scarce asset, yes. But, it can maintain its value over the ages. It has also proved it's worth serving as an insurance policy in adverse economic periods. For these reasons, gold is a haven for lots of investors.
4. Diversifying Investment
Gold is generally viewed as a portfolio diversifier. It has for a long time now acted as an investment that can include a diversifying component to your investment portfolio. That's without any fears about inflation, diminishing U.S. dollar value, or safeguarding your wealth.
If you’re looking to invest in gold, focus on diversification as gold isn’t correlated to real estate, bonds, and stocks. In short, having a diverse portfolio helps investors reduce investment-related risks and volatility.
5. Asset for Paying Dividend
Gold stocks are pretty attractive to growth-oriented investors than income investors. Therefore, they tend to rise and fall depending on gold's price. However, well-managed and profitable mining companies exist despite the lowered cost of gold.
The gold-stock prices often manifest the increase in gold's price. This can lead to excellent gains in the best gold stocks, and their owners can enjoy greater returns on investment than bearers of physical gold.
You can benefit mainly by selecting gold stocks that boast a solid historical performance. In addition, stocks that often pay dividends tend to have higher gains whenever the sector is improving than when there's a downturn.
Choose your Investment Strategy Well
Gold is a standard and long-term investment option with the most extended history. For this reason, you’ll find it in various forms. Plus, it is incredibly accessible.
When it comes to gold investment, different ways come into play. Be sure to understand each strategy and choose one that’s suitable for your needs.
Physical Gold Bullion, Jewelry, Coins and Bars
The easiest and most famous way to invest in gold is by buying and owning it in its physical form. It can be through bullions, jewelry, bars, coins, and other elegant-looking luxury goods.
Physical gold is a yellow and beautiful metal used mainly for monetary reasons. Besides that, many people use it to represent power and wealth. There’s a lot it can serve as and can yield higher rates of returns.
Jewelry is a wearable piece passed from one generation to another. Its value is obtained simply by wearing them for style and enjoyment. But, more importantly, its value can appreciate, making it a worthwhile investment.
If you want to purchase and store bulk gold with excellent delivery, go for the gold bars. Gold coins can also work best, though; you'll need to be more careful not to buy impure gold.
Gold Stocks, ETFs, and Mutual Funds
These are another common and great way to invest in virtual gold. They are ideal options for investors with greater amounts of capital to avoid keeping the exceptional metal.
Gold Derivatives, Features, and CFDs
Buying physical gold often poses a challenge in terms of storing the asset, like bars. Thankfully, gold-based derivatives make it easier and accessible to trade gold. They're potentially very lucrative.
Futures tend to be a pretty speculative investment product. In other words, traders place bets on future gold prices.
CFDs are products that give the trader an option for short or long-term investment, allowing them to earn profits from both sides.
Derivatives, by nature, rely on current gold prices in the market. This makes it a greatly diversified investment asset to include in any portfolio.
Know the Principles for Investing in Bullion
Have you opted to invest in precious physical metals like gold? Well, here are the basic principles you should know. One or all of these methods can work:
1. Buy in Bulk
Do you have more cash that's enough for your monthly earnings or savings? If yes, buying physical gold in bulk is the way to go. You'll find it pretty economical and guarantees you an excellent return on investment.
We don't mean that you should spend all your life savings on purchasing silver or gold. That can be a deadly mistake. Rather, it is best to always have some extra cash on hand for basic needs and upkeep.
If possible, save for about 3 to 6 months for cash expenses. This will restrict you from spending your stored emergency bullion for much longer.
2. Average Dollar Accumulation
This principle requires you to purchase precious metals at regular intervals, like monthly. It’s a common yet vital gold investment advice strategy to consider.
Regular purchases tend to have lesser value than buying gold in bulk. This means that you can use cash set aside from your monthly earnings for buying your precious metals. Therefore, the average dollar accumulation an excellent starting point for your gold investment desires.
If you follow this principle, you'll always purchase gold bullion at a different set of prices. The prices in the gold market will continue fluctuating, and there's no way to prevent or stop it. So, it's essential to concentrate on what precious metal you can buy and at times you can.
Some months will come with prices that can allow you to buy precious metals in plenty and other times less. However, that can be disadvantageous as only a few investors can make correct timings.
Additionally, you may develop unnecessary stress after missing out on your target or spotting an affordable entry point after already made purchases.
You should view the average dollar accumulation as a process of saving some money every month. Instead of storing cash, you keep physical gold.
Are you wondering the correct and disciplined way to save cash for your bullion? Well, you should deduct your fixed saving amount from your account right after receiving your monthly income.
Use the remaining cash for spending on your daily expenses. Otherwise, you'll soon realize you've spent all of the money. If you decide to use this approach to buy gold or silver, make sure you the same day and time every month.
With this strategy, you can:
Let's be honest. Most of us are not good financial traders. For this reason, trading will most probably be the least common gold investment advice. Unfortunately, it's also undoubtedly the hardest. Sounds discouraging, right?
It entirely depends on your motive and dedication. From a personal perspective, if you brag about how consistent or good you are at winning financial trades, it's like you're luckier than Forrest Gump.
This means that you boast surprisingly vast knowledge. You may also be better than an HFT algorithm or possibly committing fraud.
But, many investors do and can effectively grow their wealth for longer periods through trading. They tend to win a lot in value and then lose.
As one of our essential gold investment advice, trading gold is a strategy you can try. However, it would help if you did so only after creating full ownership of physical bullion.
Plus, the gold you intend to transact should stay out of your central holding to avoid impacting it. Thus, gold trading as an investment strategy should be the last one to pursue.
Gold Storage: Home or Overseas?
Many investors tend to choose their bullion storage sites basing on personal comfort. This decision is often triggered by fear but not logic. This fear makes people consider storing their physical gold at home or in a private vault.
According to me, both storage options are ideal as they serve multiple roles.
The amount of bullion and where to store it is a matter of reasoning and logic. Not the fear of possible losses or consequences of either option.
As for gold investment advice, I'd prefer buying precious physical metals for home storage. After that, focus on developing a private store main holding location. Go for one that suits you.
My rationale is based on the following summary:
Private Vault Storage
Moreover, get to know what characteristics of bullion suit which type of storage. Consider also your financial state before making a move.
You must have realized that silver bullion takes a significant portion in the two storage options above. So even though our topic focuses on gold investment advice, we need to know the value and potential of silver. Be sure to do the same to all other precious metals.
Physical bullion tends to offer a larger profit margin than gold bullion. So, it is essential to perform due diligence whenever selecting a storage facility for your gold.
This entirely involves determining if they’re legit and any other issues like delayed deliveries.
Consider your Future Needs
Taking into consideration your future desires is a regular piece of gold investment advice most of us miss. Once you’ve purchased your preferred physical bullion, what next?
We all don't know how the future will be. Even the best-set plans and intentions could turn out differently than we expected. The type of gold investment strategy you select could promote or restrict your success in the future.
Here’s what you should consider:
Need for Sale
It might be the best idea to sell your gold bullion in case of an unforeseen event. However, ensure you sell your precious metal closer to the market price as you can and without any glitches.
Yet, you may need to sell your precious metals in the future. That's because your long-term stored gold could raise suspicions of fake. This may significantly affect its ability for a quick or good sale.
Precious metals kept in private vaults are usually purchased straight from mints and refiners. As a result, they're easily accepted and bears a reasonable price tag, and you know what that means.
Quality of Life
How's your life going to be in the future? That's a critical question to ask yourself. But, unfortunately, the average dollar accumulation technique bears the risk of over-saving.
Yes, saving is pretty good. It contributes towards making your quality future life. But this comes about by sacrificing the quality of your life today.
Therefore, maintaining a balance is essential.
Make sure the amount of money you save is sustainable. Something you can consistently and comfortably keep. Don’t force any gold investment strategy that can’t work. That way, you’ll gradually develop your physical gold savings.
Invest with these Gold Mining Companies
There are hundreds of gold mining companies out there today. This makes it a pretty daunting task to find the best option for your needs.
Thankfully, these three companies are our ideal option. Read through the brief overview, pros, and cons of each company and get your perfect fit.
Are you looking to accumulate wealth and safeguard your assets against the volatile stock market? If yes, Goldco should be your excellent option.
They boast an incredible reputation with proper certifications and awards for their excellent practices. You'll find it offers a vast range of gold products and services to choose from. More importantly, their experts are beneficial and dedicated to helping you whenever you want.
Buy gold or silver metals for personal investment with Augusta Precious Metals. The company gives you proper control of your asset in precious metals.
You’ll like their vast range of selection of gold and silver. In addition, you can select how and where to store your bars and coins.
#3: Birch Gold Group
Birch Gold Group boasts 18 years in the gold investment business. It also has excellent reviews and ratings from its satisfied customers. For these reasons, it's among the most reputable and trusted dealers in precious metals in the U.S.
Their ultimate goal is to offer reliable information about precious metal investments. This guarantees better and sound investment decisions for financial success in the future.