Business Advice

Different Methods of Investing in Gold

If you are a beginner to investing, there are several avenues of investment you can consider. Most of the time, it can be risky to have your investment as cash because it can depreciate significantly in the event of inflation. Even in inflation, one investment that has remained more or less stable is gold.

You need to select a reputed company for gold bullion Morris and Watson so that you are assured about the quality of gold. When there is inflation the general cost of goods will increase and you will see an increase in gold price along with it. The reason that gold is a stable investment with a high value is that it is a limited resource. There are many ways you can invest in gold and the first method is purchasing physical gold. This is the most popular way that people purchase gold bullion which is the term referred to investment grade gold. You can find gold bullions in the form of coins, ingots or bars. The gold bars will carry information such as the purity, weight and manufacturer’s name on it. The purity is usually 99.5% for investment grade gold. You can find gold coins in so many different sizes and shapes. You can select a broker or bank to purchase physical gold.

It is very important to buy gold from a reputed seller only so that you can trust the value of the gold. While you can invest in gold jewellery, there is a cost for craftsmanship you will be paying which will not be related to the gold value. You can also use gold currency investments. One such way is buying it as a commodity linked structured investment. There is a target conversion rate that you need to agree on and you can choose either a bank or broker for this. You have the freedom to choose the duration of investment. Once the duration is reached, the coupon and principal will be made available to you in the base currency you agreed to earlier or in gold. This is a way of generating more interest compared to keeping US dollars.

There are gold ETFs which is called an exchange traded fund that can be used to invest in gold. With this method, you will not need to buy physical gold. The find will have gold backed assets. You can even trade these similar to how you would do with stocks. You can make the ETF liquid so that you can sell it off when you need it. And as there is no actual gold purchased, this is an easy investment for beginners. A gold unit trust will have gold related assets. There is active management for gold unit trusts as you will have a manager that will oversee buying and selling of gold assets. There will be some expenses you will have to deal with when it comes to fund management. Management fees for a gold unit trust are slightly more than gold ETF.

Carma Gatson
the authorCarma Gatson