Future-Proof Your Finances: Top Tips For Investing in Gold

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Gold has long been considered a safe haven for investors in times of economic woe and the price of gold has often reflected those particular shifts in sentiment and a falling stock market.

If you want to track the gold price, you can view it online here at Moneymorning.com. The questions to ask when it comes to gold are, when is a good time to invest in gold and what are the best ways of gaining exposure to the precious metal?

pros and cons of paying off the mortgage earlyA solid ally in a digital world

You can of course invest in gold indirectly without actually physically owning any of it yourself, but there is something that many investors find deeply comforting about having a physical asset of value in an investment world where everything is on a screen.

What tends to happen when you look at historical prices is that some investors turn their attention to other opportunities such as tech stocks when they come along, but we all know that that didn’t end that well for some, and gold by comparison, has generally be a solid ally to fall back on when financial markets sail into choppy waters.

There is definitely an argument to suggest that a long term holding or exposure to gold can give your portfolio a bit of an insurance policy.

You will probably find that a fair percentage of private and professional investors will suggest that an exposure equivalent to about 10% of your total investable assets in gold, will give you the chance to profit from any price rises and give you a bit of a hedge against stock market volatility.

Take a long term view

A fundamental point about gold that you need to take on board, is that it often pays to take a long term view regarding your investment in it and avoid any knee-jerk reaction to short term falls or rises.

As it stands, gold has been one of the best performing assets in 2016, and also one of the best performing asset classes throughout the 21st century, but you might not have believed that when the price of gold fell by as much as 45% in a three year period from 2011 to 2015.

Although you can certainly day trade gold in some form and maybe make money at it, it is often better to view an investment as a long term strategy that will help to preserve your wealth.

pay less in taxesHow to Invest in Gold

There are a number of different ways to gain some exposure to gold.

ETF’s

Exchange Traded Funds (ETFs) have grown in popularity in recent years and there are more than thirty ETFs that provide you with the opportunity to invest in gold.

One of the perceived advantages of investing in gold through an investment product such as an ETF, is that it often gives you a greater level of liquidity as opposed to holding physical gold and disposing of it.

Gold stocks

Another way to invest in gold would be to invest in some gold-mining companies. The obvious downside to this strategy is that you are leaving yourself exposed to all of the regular risks associated with single-stock investing.

The best performing gold stocks tend to be those that can demonstrate strong production figures and reserve growth, but investing in gold in this way definitely has some of the risks that you are seeking to insure against to a certain extent.

Coins

An easy way of buying physical some physical gold is to to invest in some American Eagle coins, and as the U.S Mint produces about 500,000 a year of them, there are plenty about.

You can buy gold coins through a network of authorized dealers which can include banks, wholesalers and brokers. One popular online store is LearCapital.com. You could also purchase some American Eagle coins, which are the most popular in the market right now. Other fairly popular coins are Krugerrands and Canadian Maples.

The point to bear in mind about buying gold coins is that you will be paying a premium as there is likely to be some sort of commission charge added to the price, which means you could end up paying a higher price than the current face value, although their value should appreciate over time to counteract this.

Jewelry

Gold jewelry is certainly an investment to consider, and it still remains one of the most popular ways of investing in gold.

It is sometimes best to buy gold jewelry firstly because you like the piece rather than for its investment potential, simply due to the fact that it is an illiquid asset that may not fetch the price you want if you have to sell in a hurry.

However you invest in gold, there are a number of reasons why this traditional asset is still considered by many to be future-proof.

Evie Jones has been fascinated with investing in gold and other precious metals since a college class on the subject. She enjoys writing on all types of investments, keen herself to see which work and which don’t and hopes her knowledge will be useful to others looking to make a better future for themselves.

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