How To Start Invest In Gold For Beginners

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Should You Think About Investing In Gold

Adding gold to your portfolio and gaining exposure to gold can diversify your investments and help you weather the volatility of stocks and bonds. While the performance of gold are pretty consistent in both good and bad times, the price of gold and precious metal like gold and silver typically raised on the long run.

Unlike fait currency which are paper money, gold have been considered the currency of trade for the past 5,000 years due to it’s scarcity, density, malleability and the ability to remain unchanged even after years of storage.

However some critics argues that gold no longer holds monetary qualities as many countries stop using the gold standard, where the value of currency is based on gold.

The fact is that United States government is currently holding more than 8,133 ton in 2022 and 7,413 tons of gold in it’s gold reserved in the year 2023 shows that the gold standard is not gone.

Top 10 Countries Holding The Largest Stockpile of Gold

Today, United States holds the largest stockpile of gold reserves followed by Germany, Italy, France and Russia:

• United States: 8,133 tons
• German: 3,355 tons
• Italy: 2,452 tons
• France: 2,437 tons
• Russia: 2,298 tons
• China: 2,025 tons
• Switzerland: 1,040 tons
• Japan: 846 tons
• India: 787 tons
• Netherlands: 612 tons

With United States holding more gold any any other country, it shows that owning some gold or having some of your assets in gold can be a great way to protect your investment.

Gold Investment As A Way To Diversify

Investors commonly agreed that investing in gold is one of the best way to diversify from the common investments such as stocks and bonds, it can even hedge against the dollar and protect yourself from the impact of inflation.

But it is good to know that even gold prices can change from time to time.

For the past 20 years gold prices have been valued from as low as $537.23 per ounce in 2003 to as high as $2,423.60 per ounce in 2010, and $1,346.49 per ounce in 2015 to as high as $2,289.12 per ounce in 2020.

At the moment of writing, today gold price is at $1,921.60 per ounce.

The overall trend of gold prices have been steadily rising throughout the years but depending on when you are buying and selling your gold, like all investment it comes with some form of risk.

Personally, I think gold is a great way to invest for retirement and for diversification, thus I won’t mind having a some percentage of my portfolio in gold.

How To Buy Physical Gold

Buying physicals gold is probably the most attractive choice for most gold investors. Not only you can feel and touch the shiny metal, it is tangible and it gives you a peace of mind.

When you are looking to buy physical gold, here are some things you may want to keep in mind.

1. Find A Reputable Gold Dealer

Buying and selling gold is only safe if you are dealing with a reputable gold dealer.

Like any other industry, there are always pushy salesman trying to sell you gold and other precious metal for an high price. Unlike stocks or bonds, gold purchase is not as regulated, unless you are buying gold using Gold IRA.

Before buying any gold or precious metal from any gold dealer, here are some things you may want to consider:

• Check reviews of the gold dealer and understand the experience of the past buyers.
• Research the gold dealing at the Better Business Bureau (BBB) to understand the trustworthiness of the business.
• Check the current gold price so that you know that the price charged by the dealer is not inflated too much.

Do your homework before choosing your gold dealer.

2. Understand Your Fees

Gold dealers typically charge more than the gold’s “spot price” meaning it will generally cost more to buy the gold than the current price of the gold where it is selling.

In normal circumstances gold and silver cannot be brought at the spot price, but depending on the gold dealer, you can buy gold and silver as close to the spot price as possible.

The difference in the price is what the gold dealer charges and it is commonly called as the spread.

The price spread or the fees generally range between 1% to 10% depending on where you buy you gold and silver.

Having said so, it is not always wise to buy gold and silver from gold dealer with the lowest price spread.

I will preferably choose a gold dealer which is reputable and secure over another with low price spread.

3. Getting A Secure Storage

Investing in gold comes with some hidden fees, and one of such fees includes secure storage.

• If you are buying small quality of gold and silver, it is easy to store it at home, but you will risk it getting stolen if you didn’t sore it securely.
• If you are buying lots of gold, it will be advisable to store it at bank safe, safe deposit box or other gold and silver vault storage service, where they provide the highest level of security for your gold assets.

These storage facilities comes with a monthly or yearly cost to help keep your gold secure.

4. Buying Insurance For Your Gold

Gold insurance is the other hidden cost of owning physical gold.

Unless the amount of gold you own does not amount to a small fortune, buying a gold insurance that help you protect your asset can be a wise thing to do.

5. Buy The Right Type Of Gold

The common way to buy gold and silver is using cold hard cash, which is quite straightforward and simple.

Most people will buy gold jewelry and consider it as a way to hedge against inflation, but in fact gold jewelry don’t sell at a fair price compared to investment grade gold.

For it to be consider as an investment grade gold, it need to be at least 99.5% purity.

• Gold bars with manufacture’s name, weight and purity stamped on it.
• Gold bullions and coins offered by official government including American Gold Eagle and Canadian Maple Leaf.

Investment grade gold are valued according to the weight in gold, availability and condition. These are often certified or accredited.

How To Buy Gold Stocks, Gold Mutual Funds and Gold ETFs

Investing in gold stocks, gold mutual funds and gold ETFs is probably one of the easiest ways to enjoy the benefits of gold investment while diversifying your portfolio from the common stocks and bonds investment.

As the price of gold rises, your investment generally rises as well, and to purchases gold investment this way, you’ll need to follow a few simple steps.

1. Understand which exchange you are intending to start your gold investment.
2. Find the best brokerage account that offers low fees and easy to use user interface that offers to trade in the exchange you choose.
3. Fund your brokerage account accordingly.
4. Research the different gold related assets on the exchange.
5. Pick the right gold-related assets to invest.

Like investing in common stocks, investing in gold related stocks, ETFs requires a basic understanding of the fundamental analysis and technical analysis.

If you are unsure, learning how to invest in assets such as Gold ETFs or physical gold can be a good place to start.

Check out this quick explanatory video by GoldBroker to learn more about gold investing.

Want to start investing in physical gold? Check out GoldBroker, the largest Gold IRA provider and find out!

How To Invest In Gold For Retirement

Gold IRA is a Self-Directed Individual Retirement Account (SDIRA) that let you invest in gold bullion and coins for your retirement.

Unlike normal IRA account, Gold IRA give you the exposure to a larger variety of assets such as owning physical gold and other precious metal in your IRA account. Some even allows you to invest in gold stocks and gold ETFs using your Gold IRA.

Gold IRA provides hedge against inflation as well as letting take advantage of the tax benefits helping you in preparing for your retirement.

Precious metal IRA provider such as GoldBroker provides one stop solution for retirement savers to gain a peace of mind for their retirement by providing service such as:

• Educating gold retirement savers about Gold IRA and how it help to protect their retirement.
• Support the investors on the long term by helping the investors to diversify their retirement with gold and silver bullion and coins over their lifetime.
• Help manage distribution when the investors choose to liquidate.
• Build a legacy for the investor’s family with gold and silver.

If you want to read more about Gold IRA, check out my other articles talking all about Gold IRA.