Gold has always been considered to be a valuable metal with values that allow it to be used as currency and traded in various ways.
Any investor should have investments in gold as part of his portfolio. The kind of gold that you invest in will largely depend on your investment profile. A person should have a purpose in mind for the particular investment instrument and should be willing to invest a certain amount of money despite the risks involved. Learning the basics of gold and gold investing is a must for anyone interested in including the precious metal in his portfolio. Keeping tabs on what is happening and getting insights from trading experts are also recommended.
Investments in gold can take many forms. Many of the more conservative investors take to buying gold bars, bullion, and coins not so much for investment but as provisions for future money needs. Gold can be bought and sold in major banks in countries like Argentina, Austria, Canada, and Switzerland. People buying gold should be careful where they get their gold from and how they store their gold. There are international standards that should be followed if you are to preserve the integrity of your gold as genuine. Discriminating gold buyers are particular about the paperwork, chain of custody information, and adherence to good delivery practices.
Some banks would allow you invest in gold through gold certificates in either an allocated account or an unallocated account. These are simply pooled gold bars, bullion, and coins held in custody by the bank for its investors. Gold certificates are considered to be liquid assets that can easily be sold for cash.
In recent years, personal gold investing is also made possible through retirement funds such as the United Kingdom’s Self-Invested Personal Pensions (SIPPs) and the United States’ Individual Retirement Accounts (IRAs). There are government policies and restrictions that are followed in the kind of gold products that can be bought under these retirement accounts. Gold instruments bought as part of these retirement accounts also often come with some form of tax relief or incentive.
I don’t like the idea of exchange traded funds. Unlike the more conservative way of personally buying and holding on to gold, gold investment funds in the world’s major stock exchanges are more volatile in value and require more financial savvy. Although gains can be realized over the short term when gold prices surge, investing in gold ETFs is really meant to be done over the long term. No longer does investing in gold rely merely on gold values with ETFs. Other external risk factors are now involved and any gold investor should realize these risks so he can craft his investment strategy accordingly.
Adding gold to your portfolio is a good way for you to protect, grow, and transfer your hard-earned money. Ideally, you do not put your eggs in one basket when you invest. Your entire portfolio should be made up of several instruments to fit your various financial needs. Dedicating a percentage of your total investment portfolio to gold would be a good way to provide a hedge against inflationary forces and currency movements. Investing in gold should not be done on a whim but rather as part of an entire financial plan, coherent with your present financial position and the kind of financial future you expect.