Investing in gold ETFs or exchange-traded gold funds seems like a good idea for knowledgeable investors. Gold has been a valuable resource that has not been readily available since the beginning of time, and the limited amount of gold increases its value.
Buying gold has long been a strategy used by investors to hedge against inflation and the depreciation of the US dollar. The price of gold (and the price of other commodities) is rising in direct correlation with the depreciation of the dollar, so now may be a good time to dive in.
When it comes to buying gold, you actually have several options. You can buy gold coins. In many cases, these coins are actually much more valuable than their face value. The total amount depends on how much gold these coins are made of. Since gold is a soft metal, other metals, usually copper and silver, are added to gold coins.
The amount of other metals means that the gold coins that you have don't have a lot of gold in them and therefore are not very valuable. The American Gold Eagle is one of the most popular gold coins on the market.
You can also buy gold bars. These rods are available in different sizes. You can either own them or find a company that has them for you. By going this route, make sure that you really own the precious metal and are insured so that if something happens you don't waste your initial investment.
Another way to own gold is to invest in a gold mining company. This can be lucrative, but keep in mind that in the end you don't really “own” anything. The stock you have in the company is as valuable as the company itself. If your company goes bankrupt, you're out of luck.
Exchange traded funds are also stocks that companies can buy. In this case, you are buying shares in a company that owns gold. It's not necessarily in the mine itself, but in the actual gold reserve. Again, you don't actually own the gold, and your investment is just as good as the company you bought the stock from.
If you plan to use physical gold, be it gold coins or gold bars, remember that you need a safe place to store it. The gold bar is heavy. So when rumors spread that the basement is full, you need to worry more than just lifting it. You could be robbed and probably killed. Please be quiet.
Of course, you can also have your bars and coins stored in a safe at your house bank. This offers more security. Still, it's a good idea to keep your assets with you.
When investing in gold, etc., keep in mind that if you don't own gold, your investment is just as healthy as the company that bought the stock. Please choose carefully.
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