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A Basic Guide to Investing in Gold

Gold has been a human asset for centuries. Our forefathers have been carving gold and coveting it for centuries. It is no surprise if investors today rush towards gold and add the coins to their portfolios. If you have been thinking about putting your money into gold, you have got our vote, to begin with.

RODNAE / Pexels / Termed as a Safe Haven, gold is one of the most sought-after assets that you can own.

Ask any investor and you will get the same answer: Investing in gold is safe as a haven. Part of the reason is that the price of gold doesn’t go up or down right away – in the international market. Unlike other investment portfolios like the stock market, gold doesn’t lose its value. On top of that, if the value of other portfolios falls, gold sustains its value in the international market.

Likewise, investment gurus suggest that apart from all the pluses, investing in gold is an effective way of long-term and retirement saving. Meaning that through investing in gold, you can save up for your retirement where you can age with grace. With that said, to make the most out of this Safe Haven asset, familiarity with the basics and essentials is mandatory. You should have some understanding of things like: How to invest in gold? What method is the best? And when is the perfect time to invest in gold? Let’s cover these basics step by step:

Ellis/ Pexels / Gold can be a savior if bought, stocked, and invested the right way.

Two Ways of Investing in Gold

There are two fundamental ways to invest in gold: Physical Gold (i.e. coins) and Gold-Backed Securities. As the name suggests, physical gold refers to tangible coins. So, the first way could be to visit the market and buy the physical gold coins. The benefit of investing in physical gold is that you enjoy the possession of the most soothing asset that you can ever own.

However, buying physical gold comes with some risks as well. Some of them are:

  • Risk of insecurity and stealing.
  • Additional charges for buying gold coins, which are mostly 10% higher than the actual price of the gold.
  • Demands high-alert security

David / Pexels / Possessing physical gold coins is a hobby of numberless gold enthusiasts.

The second way of investing in gold is through Gold-Backed Securities. Unlike physical gold, gold-backed security does not have any physical existence. Nonetheless, you still own gold as your assets, but without any physical possession. In other words, you own intangible gold in your assets. The pluses of gold-backed security are:

  • No security risk involved.
  • No additional charges like physical gold.
  • The stock is more versatile than physical gold.

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