Are you considering adding Gold to your portfolio? There are several ways you can invest in Gold. Financial Institutions have created several financial instruments that make it much easier to invest in Gold.
1. Buy Physical Gold
Do you own any gold jewelry? If so, you are already invested in gold. Great start! However, jewelry does not contain pure gold. If you truly want to invest in gold, then you would want to purchase gold coins, bars and bullion.
As of this writing, the current price of Gold is about $1,179 per ounce. I know what you are thinking, “I don’t have $1,179 to invest in gold right now”. Don’t panic, Gold coins and bullion come in several different weights and types. You can buy Gold in fractions of an ounce, making it much more affordable to add to your portfolio.
You can store physical gold coins and bullion in many ways. You can purchase a safe and keep your gold in your home or office. You could also store them in a safety deposit box, for a fee of course, or you can buy them from an online broker and the broker will store them, also for a small fee. Generally storing them in a safety deposit box or with a broker also covers you from loss or theft but read the terms closely.
2. Invest in Gold Mining Stocks
Buying and selling gold mining stocks are easily processed through your investment brokerage account. Gold mining stocks and ETF’s will diversify your gold investment in your portfolio. You can easily buy 1 share or 1,000 shares, depending on your gold investment money allocation. (Get the Gold Mining Stock at InvestmentMine )
Generally gold mining stocks move in the same direction as gold but keep in mind that gold mining stocks have gold mine production costs and other operating expenses that impact their value.
3. Invest in Gold Funds
If you are not interested in investing in physical gold coins and gold bars, you may want to consider exchange-traded funds, mutual funds or closed-ended gold funds. All these options invest in companies that are involved in gold-related activities.
Gold ETF’s trade just like a stock. You can buy 1 share or 1,000 and you pay a small commission fee when you buy or sell.
Not all Gold Mutual Funds, ETF’s and closed-end funds are equal. You will want to read the prospectus and determine which funds will be best for you. The prospectus will show you what securities the fund is invested in.
If you buy multiple funds you will want to make sure there is not a lot of investment overlap in the same securities.
4. Gold Future’s Contracts
You may want to consider buying gold future’s contracts. Gold future contracts are an agreement to buy or sell standard quantities of gold at a specific price, place and time. This is one of the riskier gold investment choices but has the biggest reward potential. Gold futures enable you realize quick gains, or losses, depending on the movement in gold prices and your contract terms.
Investing in Gold can be very volatile, but you can minimize your risk/reward ratio. Every portfolio should have a portion of their money invested in Gold. There is a strong correlation between the U.S. Dollar value and the Price of Gold which is the main reason people allocate a portion of their portfolio to Gold.