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People have been investing in gold for centuries. While the idea has long since been ditched, every single piece of currency in circulation at one point would have been backed by physical gold sitting in a vault somewhere.
Gold is one of those investments that has proven itself to be stable, even in the midst of an economic crisis. Many people actually liken investment in Bitcoin to an investment in gold. It isn’t hard to see why.
Investing in gold isn’t going to be easy. However, it isn’t going to be as expensive nor complicated as one would think either. This is because there are multiple routes to investing in gold.
Gold is a solid investment. This is because it is one of the original investment commodities.
When somebody is looking for an investment, they want something that can earn them money. They want something that is stable and may be able to generate small returns in the future.
Gold fits the bill. While the price of gold can fall on occasion, it does tend to be one of the investments that will always bounce back. This is because any serious investor will invest in gold. Gold is also vital in our day-to-day lives. It is a requirement for many pieces of technology, and this is unlikely to ever change.
In fact, one could reasonably argue that gold is a far better commodity than bitcoin when it comes to stability. Anybody that has paid attention to the news will know that Bitcoin could easily have thousands of dollars trimmed off the value in the space of a few hours. This would never happen to gold.
At the moment, there is also a global fear that Bitcoin could be regulated. This is something that has already happened in China and in many parts of Europe. If Bitcoin regulation is introduced in major markets, then the value is going to fall drastically. This is something that is never going to happen with gold.
Investing in Physical Gold
The easiest route to getting into investing in gold is to purchase physical gold.
The first option that will often spring to mind for people would be purchasing gold bullion. Although, this can be a rather sizable investment for many people.
Many people will start their investments by purchasing physical gold pieces such as jewelry and coins. Although, a person would have to be careful to ensure that they are only purchasing based on the value of the gold, not the rarity of the piece.
Investing in Gold Stocks
Gold stocks are where many people will focus their attention when it comes to investing in gold.
There are companies all over the world mining gold. Many of them are going to be listed on various stock exchanges. These are the companies to invest in.
If the price of gold goes up, then the stock value of the company will rise. If the company discovers a lot of gold, then the value of the company will rise. When the value of a gold mining company does fall, it will never fall by all that much. This is because the value of gold is never going to fall by all that much.
Of course, investing in gold stocks shouldn’t be too complicated. Getting in touch with a stockbroker is all that is required. This is something that can be dealt with online nowadays. This means investing in gold stocks is easier than ever before.
Investing in Gold Mutual Funds
Investing in gold mutual funds is often recommended for beginners. This is because mutual funds tend to be much more stable investments than investing in a gold mining company. This is because many gold mutual funds will rely on asset diversification. They will have invested in gold in many different ways.
There are many online brokers that will allow investors to invest in gold mutual funds. However, investors should bear in mind that some of the best gold mutual funds will have fees that need to be paid each year.
Investors should also bear in mind that gold mutual funds will not track the price of gold exactly. These funds can see their value plummet, even if the price of gold rises. Basically, they are much less stable than direct investment in gold.
Gold Futures and Options
New investors may want to steer clear of gold futures and options. This is because it is tricky to get them right. If somebody gets them wrong, then they can end up making huge losses.
Gold futures and options essentially allow an investor to predict the way in which the price of gold will move over a certain period of time.
Gold futures is when an investor guarantees that they will buy or sell gold on a certain date. The price will be fixed at the start of the future.
Gold options are when an investor guarantees that they will buy or sell gold on a certain date. However, the price will be based upon the market rate for gold at that time.
Investment in gold futures and options can deliver huge returns. However, the risk is also high. Many people can end up losing more cash than they originally invested. In theory, there will be no cap on losses.
Conclusion
Investing in gold is neither tricky nor expensive. Many investors can get started with just a few hundred dollars. Sites like WealthyMillionaire.com will be able to guide people through the process of investing in gold.
Featured Image: Twenty20
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