Investing in gold has become one of the most successful investments for any type of investor.
Gold is one of the most important assets that you can own. However, there are a number of different ways that you can own this precious metal. Therefore, you need to know the best way to own gold in order to take full advantage of your investment. If you’re not sure on where to start or how to create a precious metal portfolio, you can contact the executives at Allegiance Gold. Here’s a look at the different ways that you can own gold and the best way to hold the precious metal in your portfolio.
Different Ways To Invest In Gold
There are five popular ways that you can own gold. Each of these options is easily available to the average retail investor. Here’s a look at each gold investment option:
1). Gold Exchange-Traded Funds
One of the most popular ways for the average investor to own gold is through exchange-traded funds or ETFs. An ETF allows you to buy and sell gold much like a stock. Here’s a look at the most popular ETFs available:
- SPDR Gold Trust (GLD)
- iShares Gold Trust (IAU)
- Aberdeen Standard Physical Gold Trust (SGOL)
With gold ETFs, you do not actually grow gold. Instead, you own an ETF that either holds gold derivatives or physical gold. While ETFs are a great way to trade and speculate on the price of gold, it is not the ideal way to own gold over the long term.
2). Gold Derivatives
Gold derivatives are contracts that allow you to speculate on the price of gold in the future using leverage. Some examples of gold derivatives are gold options contracts and gold futures contracts. Gold derivatives are used for the short-term speculation on the price of gold and are not practical for long-term gold ownership.
3). Gold Mining Stocks
Gold mining stocks are a way to invest in companies that mine gold out of the ground. One of the reasons why many precious metal investors like gold mining stocks are because these stocks tend to act as a leveraged play on gold. However, you pay for that leverage by taking on some risk. Unlike gold itself, gold miners can go bankrupt due to a number of issues including financial mismanagement and corporate scandal. Also, some junior gold miners can be outright frauds by claiming that they own valuable gold mines which may not exist.
4). Gold Custody
Another way that you can hold gold is to buy the physical precious metal and have a third party hold it in custody on your behalf. The third-party charges you storage fees to hold on to your gold. At any time, you can request to have the gold delivered to you. While many gold investors like the idea of having someone hold their gold, it does come with some risk. There is a risk that the custody company can be a fraud or that they may not be able to deliver the gold during a crisis situation.
5). Physical Gold
The most “pure’ gold investment strategy is to purchase physical gold and take possession of it. You can purchase gold from pawnbrokers, gold dealers, and private parties. The great thing about owning your gold is that there is no third-party standing between you and your gold.
Why Physical Gold Is The Best Way To Invest In Gold
Out of the five methods listed above, owning physical gold is the best way to invest in precious metals. Here’s a look at five reasons why you should buy your gold coins and gold bullion and take them into physical possession:
1). There is no “middle man” between you and gold
You don’t have to worry about anyone coming between you and your precious metal investment. This may be important during a financial collapse.
2). You can easily sell it or use it as a currency
Just about any pawnbroker or gold dealer will purchase your gold and pay you in US dollars. That means that your gold is more liquid than most physical investments.
3). Reduces the chance of losing the gold in an economic crisis
If there is a true financial crisis, the derivative and stock market can collapse. Physical gold, however, would not be greatly affected by such a collapse situation.
Investing In Gold The Right Way
If you would like to invest in gold the right way, then consider owning physical gold coins or gold bullion and take them into your possession. With physical gold, you will have real wealth that can act as real money in any situation. Allegiance Gold has been educating their clients and the general public on the importance of investing physical gold coins and gold bullion. This form of investing in gold and by rolling over retirement accounts into gold IRA accounts has been a successful route to investors preserving their wealth. Contact an executive today at Allegiance Gold to find out more about investing in gold and about our FREE gold IRA guide.