In this ever-changing world, we’re always being told to invest wisely to ensure our futures…but what does this mean? How do we make sure our investment portfolio is diverse enough to withstand the rumbles of the US economy? For us, it means splitting the money between assets that operate and are affected, differently. For example, while stocks, bonds, and all the other common suggestions can be fantastic, they will all struggle for performance when the US economy hits a rough patch. On the other hand, there’s one investment opportunity unaffected by these types of factors; gold.
Why Is Buying Gold As Investment Beneficial?
First things first, gold has always retained its value throughout the history of the US and throughout the history of mankind. Before Dollars, Euros, and Pounds, gold was the standard for currencies and its value has only become more important to us since. Even through depressions and times of economic collapse, gold will keep its value because of its scarce nature. In fact, the price of gold can increase during economic difficulties because the supply can’t keep up with demand.
With this in mind, buying gold as investment will keep a portion of your portfolio secure against external influences. This becomes even more important considering the troubles the US dollar has experienced in recent years. For example, let’s look at the period between 2008 and 2012; both the US and Europe were in turmoil and the value of currencies crashed to new lows. During this same period, the price of gold reached nearly $1,900 per ounce after a 100% increase in price.
In addition to this, we also need to consider inflation and the increases we often experience to the cost of living. During years of high inflation, this is a problem for the stock market…but a benefit for the gold market. Over the last five decades, gold prices always tend to follow inflation which brings yet more security in a world of confusion and insecurity.
Finally, we should also mention the scarcity of gold once again. So far, the majority of gold has been mined from China, South Africa, and Australia. According to the United States Geological Survey, the human race has discovered 244,000 metric tons; if all this gold were to be brought together, it would form a cube of 28 meters in all directions.
With these reasons alone, you can start to see why buying gold as investment can be a great decision. So, with this in mind, how do you actually invest in gold? We’ve listed some advice below!
How To Invest In Gold
In truth, there are a number of ways to invest in gold and the method you choose will depend on your financial goals (as well as your budget!).
- Physical Gold – Firstly, physical gold is perhaps the most basic way to own the precious metal and it’s useful because it has universal value. However, physical gold shouldn’t necessarily be regarded as an investment; it’s more suited for financial insurance, wealth preservation, and for passing assets from one generation to the next.
- Gold Certificates – If you don’t want the responsibility that comes with physical gold, there could be an alternative in certificates. This is slightly different and it’s important to note the difference between ‘allocated’ and ‘unallocated’ gold. With the former, you own the gold, you’ll have an account number, and the precious metal will normally be accessible. With unallocated gold, like certificates, you receive a promise to provide the gold (should you need it).
- Gold Exchange-Traded Funds (ETFs) – Some people want to invest in the gold industry rather than in gold itself and this will be an option with gold exchange-traded funds. Rather than the physical metal, your money will track the price of gold as it changes over time.
- Gold IRAs – Finally, and this is an option that many people forget (or of which they aren’t even aware), we have gold IRAs. When it comes to buying gold as investment, gold IRAs are one of the best ways because they tend to outperform all other paper investments.
We actually want to go into a little more detail for gold IRAs because the solution is often overlooked and not many know how it works (or they have misconceptions). Once the online application has been completed and the request has been processed, the very best companies will contact your custodian on your behalf to discuss a transfer. Once the company has received the money from your existing IRA, the funds can be put towards your chosen precious metal.
When making a huge decision, like transferring an IRA, one of the most important steps is finding a reliable and professional service. Ideally, you need a company who has experience in the industry, offers opportunities to store gold abroad with no penalty, has a guarantee of delivery, and who segregates the metal during storage.
If you want more information regarding gold IRAs, or perhaps you just want to learn more about how it all works, we highly recommend the free gold investor’s kit from Regal Assets. The company is listed with the United States Mint, has an A+ rating from the Better Business Bureau, and has great reviews online.
Investing In Gold – FAQs
We often read many of the same questions regarding the process of buying gold as investment, so we’ve answered a few below!
Isn’t buying gold lots of work? – These days, with the investment many companies have made in the industry, investing in gold doesn’t have to be a big upheaval. Even when transferring from a traditional IRA to a gold IRA, the best companies will do everything for you. As long as you tell the company your goals and needs, you won’t have to do much at all.
Doesn’t the value of gold build slowly? – Compared to other investment opportunities, the return isn’t going to be a huge percentage in a short period of time. However, gold allows you to reduce risk and have an asset that isn’t affected by the economy or currency. We recommend having a diverse portfolio of several assets.
Is there more gold to be mined? – Yes, but not an ample supply. One of the reasons why gold retains its value is because there’s a finite supply; it can’t be made from other materials.
How do I know who to trust with my IRA? – We recommend talking with potential providers, reading reviews online, and assessing their reputation within the wider market. With Regal Assets, for example, they’ve featured on Reuters, Bloomberg, The Huffington Post, and Forbes. In addition to this, they have nearly 120,000 Facebook likes and a #20 ranking by INC 500.
Where should I store precious metals? – If the service doesn’t help with storage, the most secure solution would be a bank safe deposit box. If the investment is significant, you might be suggested a licensed and insured depository.
With all the benefits of buying gold as investment, and the process now easier than ever, now is a great time to take action. Securing your finances for your family and future generations, gold will always be valuable and a fantastic addition to your portfolio!