A Guide to Buying Into Gold

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When it comes to investing, there’s no such thing as a completely sure thing. Indeed, these days some people feel that even putting their cash in a bank account is a bit of a risk, and understandably so.

However, in the world of money, without risk there’s no reward. Fortunately, if you are willing to go in search of a return, you needn’t be a master at economic analysis to pick an investment likely to give you good value.

Why Buy Gold

When you invest, whether by simply putting your money in financial institution such as a bank, or by buying shares in a company, in essence you’re placing a bet that the value of the organisation will rise.

This, as you’d probably expect, can be a tricky bet to get right. There’s an awful lot to consider. In our modern world everything is connected, and making accurate stock market predictions is increasingly like trying to get a hold on chaos theory. Seemingly minor, utterly unforeseeable events in one country can end up setting off a chain of reactions that end up having major consequences for the global economy.

Gold is such an attractive investment because, to a large extent, it sits outside the tangled web of the global economy and offers something of a safe heaven against all the uncertainties of the ever changing fiscal landscape.

Thanks to the fact that throughout history gold has always been highly valued by a wide range of cultures, it acts something like an unofficial worldwide alternate currency. This fact in of itself means gold has a level on immunity from fluctuations in currency markets and can’t be affected by the monetary policies of any one government.

As a result a gold IRA investment is seen as a safe heaven in times of uncertainty. Furthermore, it’s always in demand and is therefore easy to buy and sell (what you’d call a liquid investment). This minimises the risk of you being lumbered with it should prices drop.

Ways of Buying Gold

There are a number ways you can benefit from investing in gold. Whilst the most basic would be to take ownership of bullion, there are number of other less direct ways you can get a return out of gold, many of which have their own distinct advantages;

Rare Coins

Much like buying bullion, investing in gold coins is a straightforward way of owning gold outright in physical form. However, it has a unique advantage to simply buying gold bars in that, as well as investing in gold, by buying a gold coin you’re also investing in an antique.

So, if for some reason the price of gold falls temporarily but you find yourself in a position where you really need to sell you may still be able to make a return by finding a collector interest in your coins purely as collector’s items. Gold is generally thought of as a non-volatile, low risk investment anyway, but buying it in a form that has two separate sources of value (the material itself and as an antique) you can spread the risk even further.

Mining Firms

One way to tie your money to the fortunes of gold is to back a company involved in the extraction of the precious metal. There are few key advantages to buying into gold in this manner. For one thing, as well as having the shares as an asset you’ll also receive dividends from the company, which can be considerable.

Another great advantage is that shares in mining firms will rise behind the price of gold. Due to this time lag in the link between the price of gold and value of mining shares, you’ll have a strong indication of what lies in store for you.

There are also some disadvantages you need to consider before investing in this way however. Generally there’s a minimum investment you have to make and often you have to leave your money in for a set period of time, meaning it’s not really a great short term option.

Exchange Traded Funds

ETFs are one of the most popular ways to invest in gold without actually buying any. ETFs are something like managed funds on a smaller scale. They don’t reflect the value of one particular product or company, but instead are designed to reflect the changing value of the market as a whole. As a result the fund might contain with it a number of gold related products, including futures and derivatives.

Tough this may sound complicated, it’s actually one of the simplest ways you can ride the rising price of gold. You can buy and sell ETFs through a broker just as you would with a regular stock market share, but you benefit form the fact that its price reflects the gold market as whole, helping the spread your risk. In addition, trading ETFs can be a more tax efficient way of investing ,as capital gains tax is not incurred until the fund is sold on, helping you delay your bill whilst its value builds.

If you already have gold, there are various websites which you can sell gold bullion today.

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