Buy Gold the Right Way by Knowing these Secrets

By: Tl Kleban
As an investor, the glitter of gold can catch anyone’s eye. It has for centuries and lately, it seems, it has once more. The price of the precious metal is now at levels we haven’t seen in almost 25 years and leading investment advisers are hyping gold as a the latest way to diversify your portfolio and protect yourself against inflation during the recent decline in the value of the dollar.

What makes gold so difficult for investors is that gold can potentially be owned in a few different forms with some riskier than others. Costs associated with all of the different forms as does its liquidity. If investing in gold for the first time is something that interests you but are not sure just how to get started with such an investment, perhaps you can find some useful ideas in this guide. Here's a look at just a few of the more popular ways to participate in today's gold rush.
  • Know there are five principal ways people invest in gold. They are in tangible coins and bars, certificates, precious metals mutual funds, stock in mining companies, and gold and metals futures. If safety and diversity is something that you would primarily be interested in, then coins and bars would be best choice.


  • All of your tangible gold should be broken down in two subcategories.

    They are either bullion or numismatics. Pure or almost pure gold falls under the gold bullion category, notable for its bar form. Minted coins such as commemorative ones are considered to be numismatics.


  • Go online and do a search for brick-and-mortar precious metals dealers or any websites that do dealings in it. There are certain questions you should pay attention to and definitely get answers to each. Some of these questions would be to ask how long the dealer has been in business, whether or not they specialize in one specific segment of the market, and who their typical client would be.


  • Don’t make any rash judgments and never impulse buy but instead, shop around to a few different places. Coins and bars all have different markups but a one troy ounce size is the most popular since it is easy to buy, sell and store.


  • When it comes to the market for numismatics, it couldn’t hurt to educate yourself a little about it. For example, did you know that the design and condition of a gold coin will affect the price nearly as much as the gold content of the coin?


  • If you’re not interested in storing anything, go with the option of buying certificates instead. These certificates act as a representation of your ownership for a certain quantity of gold.


  • What about investing in gold stocks and funds as a different choice? Since they are diversified and managed, gold funds are definitely the most stable of all your choices but be careful when it comes to stocks in gold because you are buying into only one company which makes that investment less stable.


  • If you’re one of those people who like to live on the edge then gold futures is the high risk/high potential return choice for you. That is if you have confidence in your ability to predict the increase or decrease of the value of gold. Basically, they are a contract to buy or sell at a specific point in time for a particular set price. How well you do with them is dependant solely on the value of gold during the contract term.

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