Investing in Gold
It has become common to see ads and signs for people offering to pay cash for gold. That is because gold prices have continued to soar year after year despite the downturn in the economy. This can be attributed to the fact that 50 percent of the world’s population believes in gold as a sign of love, affection, as gifts and as status symbols. India and China made up half of the world demand for gold in the second quarter of 2011.
While some may think that this means that more gold mines will open up and supply will rise to meet demand. However, gold is not as easy to find or as easy to mine as it used to be. Most of the easily accessible gold has be found and mined, so it is now much harder and much more expensive to find and mine gold. When it comes to investing in gold there are several options available.
Gold Stocks And Funds
This type of gold investing involves buying stock in a gold mining firm or investing into a mutual fund that invests in gold. You can find a number of brokerage firms that will help with buying and selling these types of investments. The bonus to investing in gold stocks and funds is that it can be even more liquid than investing in actual gold. The additional benefit is that there is no worry about having to store or protect this type of gold investing.
This type of investing does carry risk however and may drop in value independently from the price of gold. So even when gold values are rising, the value of gold stocks and funds could decline. You should make sure that if you are going to invest in gold stocks and funds that you work with a licensed commodity broker.
Bullion And Bullion Coins
If you are unfamiliar with the word bullion it refers to a bulk quantity of gold, platinum or silver as assessed by weight and cast as ingots or bars. Bullion coins on the other hand are coins that are found in gold, platinum and silver and they are kept solely as investments. These coins are not used in regular commerce or transactions. Typically a bullion coin will get its value from the amount of precious metal in the coin and not from the condition or rarity of the coin. These coins can be bought from countries all over the world, but the U.S. Mint produces gold, silver and platinum coins for investment and guarantees the quality. The U.S. Mint guarantees the weight, content and purity of all the investment coins that they produce.
Unlike bullion coins these are coins that do get their value from their condition and rarity. Collectible coins get their value from their historical value rather than their precious metal content, and this value will exceed the value of the metal. Prices for collectible coins can be subjective however so real values of collectible coins can be hard to pinpoint.
Tips When It Comes To Gold Investing
- When you purchase gold from a dealer or brokerage firm it is important to keep in mind that they will always charge more than the value of the gold the products have. Therefore, you should also make sure that you compare prices and do research on values and weights of the metals to be sure that you are getting a fair price.
- Gold prices always fluctuate just like the stocks. There is never any guarantee that gold will continue to increase or maintain its value when you are ready to cash out. Therefore, you should invest in several different things to protect yourself against volatility in all arenas.
- You should always get independent appraisals of the gold that you are planning on buying so that you can protect yourself against sellers that are boosting the value of the gold in order to get more money.
- Many firms will send your goal to a depository for protection and you will not take the possession of the gold personally. This is especially true when it comes to IRA gold investments. Therefore, you should always take precautions to make sure that the gold is delivered to where it should be and that the gold is placed there and stored in your name.
- Always read reviews and research any company that you plan to invest with. You want to make sure that they are reputable and that other people have had good experiences with the company. You will want to know how the company works and how many people have made money through the investments that were recommended.
- Never “act now” take you time to research the opportunity that is presented to you and make sure that it is the right investment for you. No investor should pressure you into sending money or transferring an IRA without allowing you time to think it over or research the gold that you are purchasing.