How to Invest in Gold for Beginners

Investing In Gold Can Be Real Simple

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Before money, before stocks, and before art, people stored their wealth in gold. In fact, gold has been seen as real money for over 5,000 years. That’s why it is important to consider gold as part of your investment portfolio. So how do you get started? If you have never purchased gold before, Allegiance Gold can help walk you through every step; as well as, educate you on the value of gold. In this article, this will help guide and show you how to get started in gold investing. 

Why Invest In Gold?

Gold is known to hold its value over the extremely long term. For instance, one Roman gold coin from 2,000 years ago has nearly the same purchasing power as a contemporary American gold coin of the same weight. If there is any instability in the stock market or in our currency, gold is likely to hold its value or even increase in value. In short, gold is the ultimate way to preserve your purchasing power. 

Ways To Invest In Gold

There are a number of ways that you can invest in gold. Each of these investment strategies has its own pros and cons. 

Purchase physical gold bullion or gold coins 

Perhaps the most traditional way of investing in gold is to purchase physical gold. You can purchase gold bullion as either bars or coins. If you are a smaller investor, you can purchase one-gram gold bars or ⅛ ounce gold coins. You can purchase physical gold from your local gold dealer, pawn shops as well as online gold dealers. 

Pros

Purchasing gold bullion is the most direct and most private way to own gold. You can store your gold at home and no one knows that you own it. 

Cons 

You have to store your own gold. Also, If you lose your gold, then you have no way to recover it. 

Buy shares in a gold ETF

You can also purchase gold as easily as buying a stock. There are a number of gold exchange-traded funds or ETFs that track the price of gold. The two types of gold ETFs are futures-backed gold ETFs and physical gold-backed ETFs. The most popular gold ETF is the SPDR Gold ETF Fund (GLD) which is a futures-backed gold ETF. 

Pros

Gold ETFs make it easy for your to invest or speculate in the price of gold. 

Cons 

Futures-backed gold ETFs don’t always accurately reflect the price of gold. 

Buy shares in gold miner stocks

You can also purchase shares in gold mining stocks which is a more indirect way of investing in gold. Gold miners track the price of gold and will tend to provide you with leveraged gains if there is a rally in the price of gold. Conversely, you can lose big if there is a bear market in gold. 

Pros

Allows for leveraged gains during gold rallies. 

Cons 

You can experience increased losses in gold bear markets. 

Buy shares in a gold mining ETF 

If you are not sure which gold miner to purchase, then you can purchase an ETF that holds a basket of gold mining stocks. This allows you to spread out your risk and potentially earn leveraged gains. The most popular gold mining stock is the VanEck Gold Miners ETF (GDX).

Pros

Allows you to spread out your risk across a number of gold miner stocks. 

Cons 

Still riskier than purchasing physical gold

Buy gold jewelry 

Finally, you can purchase gold jewelry. You can purchase gold jewelry from a jeweler or from a private seller. One of the most compelling reasons to own gold jewelry is that you can enjoy wearing it while gaining its benefits as a store of wealth. Also, it is a very private way to invest in gold. 

Pros

A private way to directly own gold. Gold jewelry can also be enjoyed as part of your wardrobe. 

Cons 

You should be knowledgeable about real versus imitation gold jewelry. 

Getting Started With Gold 

There are a number of ways that you can get started investing with gold. Consider the pros and the cons of each investing method listed above as some solutions to preserving wealth. For more information, contact the gold executives at Allegiance Gold. We offer advice on protecting your wealth and making sure your retirement goals are being met. Make sure to ask us about our FREE Gold IRA Guide as well when you call 844-790-9191.