Ready to leave the woes of 2020 behind and build a stronger, more diverse portfolio in 2021? If so, now’s the time to start learning how to invest in gold. Gold is relatively rare and its value doesn’t move sporadically like other assets like property and equities.
Many experts will tell you that gold provides insurance for your portfolio. Most people allocate around 5%-15% of their portfolios to gold investment via or gold-related investments.
The next question is: what are the first steps to investing in gold?
First, look at some top options:
Physical gold investment
Holding on to gold is still a viable option since it’s a universal finite currency, held by most central banks these days. Gold bullion isn’t an investment themselves but rather a source of finances during bad circumstances. Trading your gold isn’t recommended the same way you wouldn’t trade your insurance policy.
Gold ensures wealth preservation that you can pass to the next generation. After getting gold bullion in your portfolio, you can then consider other forms of investments like mining shares, investment funds, and other more speculative gold investments.
Gold is a proven way in ensuring wealth preservation and for keeping wealth from one generation to the next. After putting gold bullion in your portfolio, then you can proceed with other investments such as mining shares, investment funds, and other more speculative gold investments.
Digital gold currency or e-gold
Digital gold currency (DGC), aka gold grammes or very simply e-gold became increasingly popular due to ease of access via eGIA (e-gold investment account). There are currently no specific financial regulations governing DGC providers, making them regulate under self-regulation. DGC providers can either be financial institutions or banks.
Digital gold is great for first-timers looking to dip their hands into gold investment. It is primarily used by clients to purchase gold to either save as investment and/or as electronic money.
Gold exchange-traded funds (ETFs)
ETFs are funds that track the price of gold. It consists of only gold as a principal asset. Exchange-traded funds act like individual stocks, trading on an exchange in the same manner. Investors use gold ETFs to assess and reflect gold prices. The assets in this fund are generally backed by the commodity.
Gold ETF provides an investor a chance to obtain exposure to the performance, or price movements, of gold. Selling a gold ETF can also act as a hedge if your portfolio has exposure to the upside of a weaker dollar against gold.
How to buy gold stocks, mutual funds, and ETFs
To start with a gold stock or fund, you’ll need a brokerage account like eGIA, which you can open with an online broker. After funding your account, you’ll be able to choose the gold-related asset you’d like to invest in and place an order on the website.
Note that individual stocks and ETFs are purchased for their share price. Mutual funds, on the other hand, have a minimum investment requirement.
Remember to find a reputable dealer, watch out for fees, consider purchasing insurance, and read reviews before you commit. You can learn more about how to invest in gold plus updated tips and numbers for 2021 on a broker or bank’s website that offers gold investment options.
This article is for information and educational purposes only and does not form a recommendation to invest or otherwise. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.