Have you ever wanted to invest in gold? It sounds like a great idea but how do you go about it? Do you actually get gold to keep or do you get some sort of documents stating ownership? Is it a safe investment in today’s’ economy? If you have ever wondered about how to invest in gold then you will want to read this article. We will discuss 3 different ways the average consumer can invest in gold.
Direct ownership of gold is our first possibility. This is a favorite among many people including myself. This is where you have actual possession of the gold usually in the form of coins. Usually the coins are South African Krugerrands, the Maple Leaf Canadian Coins, or my favorite, the American Eagle. One of the benefits to direct ownership is that the value is based strictly on supply and demand not on any governmental forces. This type of investment is usually long term.
Gold as an Exchange Traded Fund (or ETF) is another possible option. ETFs have exploded lately and they do present an interesting option as far as gold investments. What are they? They are a kind of mutual fund that trades on the stock exchange just like a normal stock. The portfolios for Gold Exchange Traded Funds are fixed ahead of time and never change. Interestingly America has only two Gold ETFs which both use the gold bullion as their asset.
What about Gold Options and Futures? These kinds of options are usually only done by experienced investors. Now the neat thing about the options market is that you can bet on either prices rising or falling. However you should be aware that this kind of investing regardless of whether it’s gold or some other type of commodity is pretty risky. The positive aspect to it is the fact that you can control a large amount of commodities with a small investment. However things can easily get out of control causing you to lose everything pretty quickly. The futures market can be complicated to say the least so make sure you understand everything completely before laying down any money.
Remember that there is risk to all types of investing whether it be gold or a stock option. As with all things the first step to success is to make sure and do your research. Gold can be a great investment as long as you study the fundamentals of how to invest in it.