Money - Personal Finance
By: - at February 8, 2013

8 Ways of Investing In Gold

Why Should You Invest in Gold?
Gold is Rising in PriceToday, hundreds of thousands of investors and people in general are turning to gold to protect their assets and investments. The word economy is still going through a turbulent time.  The credit crunch, recessions, ever unstable stock and real estate markets all have forced millions of investors from across the globe to take further steps to protect their assets and financial security.  However, a lot of investors are more concerned about how much is gold worth per ounce or gram than what gold's future looks like.  Many investors have turned to gold as a last resort to protect their assets and the financial future for their family or children.  Traditionally, gold has been a very precious metal and has been used for thousands of years as an international medium of currency or exchange.  The recent hike in prices of gold has proved again how powerful gold can be as part of a financial fund and as a precious commodity.  In truth, many of the major economies of the world are moving towards a genuine gold standard by diversifying out dollars and euros to boost their holdings.

 Ways of Investing in Gold

There are broadly two ways you can invest in gold.  The first option is to hold paper gold represented in papers and the second option is to hold physical gold in the forms of bullion, bars, and coins.  However, there are various options when it comes to investing mentioned below:


8)  Gold Bullion
You can buy gold in various forms such as coins, bars and jewelry at various prices.  You can deposit gold in your own home or store it with a bank in safe deposit boxes. An easy way to buy and sell gold is via your local jewelry shops.  There are many companies selling gold.  You, however, have to understand what type of gold you should purchase based on your requirements.  For example, if you purchase smaller gold bars then you will have to pay higher premiums.  You should try to buy gold as close to the market or spot price as possible to avoid big premiums.  If the premium is higher, the higher the gold has grow in value to make profit from your investment in gold.

Gold Bullion


7)  Gold Bars
Gold bars can be purchased to open gold IRA account or other related accounts.  Gold bars come in metric sizes and the prices of each bar depend on a given day’s gold price.  The premiums of manufacture and marketing also add to the value or price of gold.  Also, the smaller the gold bars, the bigger the premiums are.  A lot of investors or people in general also keep a large volume of physical gold bars.

Gold Bars


6)  Gold Coins
Gold coins are universally recognized and can be sold at competitive prices.  Gold coins are available in various sizes and produced in large numbers, which can be resold easily too.  People or investors can keep the physical gold coins or buy them to invest in gold IRA accounts.

Gold Coins





5)  Gold Jewelry
In many countries jewelry is considered as a valuable asset.  Traditionally many people keep jewelry as a sign of their social status or just to save it for a rainy day.  The demand for gold jewelry is increasing every day.

Gold Jewelry


4)  Gold Mining Stocks
Investing in gold mining stocks is popular for many investors.  You basically do not invest in paper gold or gold bars or coins, but you invest in gold mining companies.  You make money when the stock prices of these companies go up.  The value of stocks increases when the price of gold increases or appreciates.  However, big investors can take the best advantage by investing in gold mining stocks.

Gold Mining


3)  Gold ETFs
Gold ETFs (Gold Exchange Traded Funds) allow you to own gold without actually storing the physical gold.  ETFs are essentially funds like shares which are traded on a stock exchange.  Investors track gold’s spot price which fluctuates based on the performances of gold.  Investors and traders can use gold also to hedge other gold positions like share or stock markets.

Gold ETFs


2)  Gold Options and Futures
Gold options and futures are risky markets where investors can hold the shares up to a certain period of time.  If you are buying gold options then you are actually betting on the prices of gold going higher or lower in a given time in the future.  Options and futures contracts have an expiration date.  So you hold your investments or bets in gold for a certain period of time.  For example, if you are speculating that gold price will go up in October 2013 then you would probably buy an October gold options or futures contract which will expire in September 2013.  You will have more than 6 months to hold the position and make money when the price of gold goes up.  However, you can end up losing all the money if markets go against your speculation. Gold options and futures are very highly speculative investment and mostly designed for very experienced traders.

Gold Options


1)  Gold accounts
There are two kinds of gold accounts, namely allocated and unallocated gold accounts.  An allocated account offers the investors to keep the gold in safe deposit box.  This is considered the most secure form of investment in physical gold.  When investing in physical gold, the gold is stored or kept in a vault owned by a recognized depository or dealer.  With regard to an unallocated gold account, investors are not allotted any specific gold bar.  However, this is advantageous for those who do not want to pay premium or insurance charges since they do not have to keep gold in a vault.

Gold accounts


The Power of Gold as a Commodity or Financial Security
Gold is freely convertible to any currency and accepted in any country in the world.  The recent escalations of gold prices were not unforeseen.  The value of printing paper money and stocks were falling apart in recent years pushing the prices of gold to new record high levels.  Gold has seen all time high records of prices from time to time in last few years.  As a result, millions of investors and people have turned to gold to protect their wealth and assets in various forms.  Since gold is considered a very safe and reliable global currency, they have purchased physical gold and invested in paper gold and physical gold to hedge their positions or investments.  Gold was for a long time used as the standard exchange rate.  Almost all countries for many years until the early 1970s, or more specifically in 1971, used gold standard to buy and sell gold and exchange currencies.  But in 1971 the era of flat money began which is the system in which the fluctuations of currencies based on consumers’ confidence, economic conditions, and domestic policies making the currencies convertible with one another.  The recent demand in gold and the financial crisis have made countries more dependent on gold to secure their currencies.

What You Should Look for When Investing in Gold
Gold is on the RiseThere are many investors who are too concerned about the relatively high prices of gold and they want to wait for lower prices.  However, serious and more educated traders are not worried about the prices but the developments in global economic conditions, inflations, and volatile stock market conditions.  It is important to understand the value of gold.  It is better to gain the insights into various properties of gold and what gold can offer in the long term to secure your assets and gain benefits.  Smart investors look at future possibilities when it comes to investing in gold.  It is, therefore, more important to look at various benefits you can get in investing gold than worrying about how much gold is worth per gram.

Certainly, traders or investors will be concerned about how much gold is in current market prices per gram or ounce but that should not be the center of their focus and attention.  Instead, educating themselves by reading various resourceful blogs and websites can help them take timely decisions in investing in gold.


Conclusion
There are wide speculations that gold prices will keep going up in coming years.  However, acting based on speculations will not be a good option alone.  The main things to take into consideration are the trends of the global economy, domestic policies, inflation rates, performance of stock and real estate markets and take calculated decisions.  Most importantly, you need to understand how you are going to benefit in the long term from gold.  Gold has the power and strength to protect your assets and help ensure your financial security.  Gold is considered the most precious metal to protect financial calamity, and it is used as insurance against inflation and currency uncertainties.


 

 

 

 

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