Talking of investments, one of the oldest strategies for that is Gold. And not surprisingly even today it is relevant. There are multiple ways and options to get started investing in gold as per your finances and comfort. The buying and selling part of gold coins is fairly easy. When the stock market goes down, gold tends to move opposite to it, which makes it a worthwhile asset in such situations. With a calculated and well-guided investment in gold, there comes a sense of security and assurance about your finances.
The intrinsic value of gold is one of the reasons to start investing in it.
Another reason why to invest in gold is that it is an inflation hedge, as stated by the World Gold Council, that is why still in 2022, one of the sound investments in gold.
What is an Inflation Hedge?
Whenever inflation costs rise, there is an investment that protects the currency’s purchasing power from that, called an Inflation Hedge. By the time or over a long period, the value of the inflation hedge either increases or just remains the same, maintained.
In order to diversify your portfolio and protect yourself from inflation, investing in gold is a good option.
There are also some risks and cons included in gold investments which will also be discussed with all its pros and advantages.
To any investment, there are both aspects of pros and cons but for beginners, gold is a much safer option.
Advantages and Disadvantages of Investing in Gold
Here are some pros and cons of investing in gold, which you must consider before making up your mind, whether to invest in gold or not.
This will definitely help you in opting for a better strategy for your future investments.
Advantages of Investing in Gold
- You have multiple ways and options to get started investing in gold as per you finances and comfort.
- As gold is an inflation hedge, it will protect you in the situations like inflation or market downfall.
- The intrinsic value of gold is one of the reasons to start investing in it.
- With a calculated and well-guided investment in gold, there comes a sense of security and assurance about your finances.
- Investing in gold can also help you in diversifying your portfolio outside the stock market as well.
- The buying and selling part of gold coins is fairly easy.
Disadvantages and risks of Investing in Gold
- As we know buying and selling gold is not sort of a big deal but storing it can be a bit expensive.
- There is no dividends and interest in gold investments.
- Several hidden fees can also be charged by the dealers.
- Sensing a good deal in gold can be hard for some beginners.
How to Invest in Gold?
To invest in gold is pretty much easy as you have many options available out there to start with.
For beginners and new gold investors, here are a few of the best ways in which you can make your gold investments.
- Physical Gold :
The most commonly practiced and widely known method is buying gold as jewelry but the thing with jewelry is that dealers do not sell them. From dealers, you can buy gold coins, gold bars, and gold bullion typically.
Investing in physical gold can give a sense of security as you have more control over that investment because physical gold is a tangible asset, which is of the reasons you must have few investments in it.
For beginners, getting a good deal can be tricky a bit as some dealers can make fool of you and charge more, the investor should have some knowledge of its quality also.
Once you buy physical gold, you will also have to store it, which can make you also pay for the storage costs.
On the other hand, gold is also not a liquid asset, so selling it can also give you some hard times.
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- Gold Stocks :
This investment needs you on your toes and your attention, as you have to be constantly in touch with the market and its business.
Investing in gold stocks is not like investing in gold, it’s like investing in the business of gold. You have to buy the stocks of companies engaged in the mining of gold and other precious metals.
This is a risky investment option but during COVID-19 market downfall, this business really outperformed.
- Gold Exchange – Traded Funds (ETFs)
When you are a beginner and want to invest in gold but without having to pay for its storage costs then this investment option can be a good choice for you.
After having an ETF you can also buy shares of the fund and there is also a storage facility that holds gold bullion.
And you can purchase these ETFs from a regular brokerage firm also.
- Gold Mutual Funds :
Investing in Gold Mutual Funds is like owning some stocks in the companies dealing with gold. This investment option can actually help you in diversifying your portfolio as you will be investing in some gold mining companies.
To invest in Gold Mutual Funds, you have to find a broker whose advice you can trust, as in this option there might be some high fees included.
So far now we have discussed some of the great options for the new gold investors.
Investing in gold is a good option and can be the best choice with better guidance and knowledge.
As there are many pros and advantages of investing in gold still there are some downfalls to it, as we know to buy and selling gold is not sort of a big deal but storing it can be a bit expensive. There are no dividends and interest in gold investments. Several hidden fees can also be charged by the dealers. Sensing a good deal in gold can also be hard for some beginners.
Still, if you can manage and are okay with these few risks included, you must make some investments in gold.