This post is going to about the subject of investing in gold for beginners. These times might be a better time than ever to consider yourself to invest in the golden king of precious metals. Why? Well, unless you have been living under a rock lately, crisis is spreading all over the world…
Investing in gold is one of the best ways to protect your assets from political turmoil and instability. A good example is a recent disagreement between Ukraine and Russia, which has thrown the economy into chaos and caused the prices of many commodities to become unstable.
Inflation has also been affected by a considerable margin since the war started, and as such, the rest of the world is feeling the impact on their economy. To protect the value of your money over time, you must invest in gold.
You can do it steadily over time by adding it to your portfolio and increasing the number of investments you have made in gold. The gold will be an excellent way to keep your assets protected from inflation which has been the norm since the COVID pandemic and the recent war between Russia and Ukraine.
When the market is very volatile, gold will protect you significantly and ensure that the price variations do not have an impact on your money. As such, you must know how to invest in gold and what you should know as a beginner that is just starting to invest in gold.
Hopefully, the information provided in this article will be a good starting point, and you will also be able to invest more wisely once you have obtained the correct information. It is also a great way to pad your investment portfolio and ensure that you are protected from the short-term price swings known to bring many other investors down.
Key Reasons to Invest in Gold
1. Gold preserves the value of your money
People usually invest in gold to ensure that their money is protected from losing value over time. It brings a sense of balance to your portfolio and ensures that the other assets that you are invested in do not lose their value. It is also a reliable means of wealth preservation, and it has been proven to have a better performance history than equities.
Gold is a more stable asset, and as such, it will give your money protection from volatility and stability. Additionally, gold is associated with a lower level of risk, even though this usually translated into a lower reward.
However, it is still a good trade-off since you will be able to maintain the value of your money over a long time. It is an excellent long-term investment and will be a great way to keep your money stable and protected from volatility and other variations that usually cause it to become unstable.
Unfortunately, investors do usually not get any income from their investment in gold since it does not have an interest rate. However, gold is the preservation of wealth and protects your money. However, the price of gold is known to increase in the long run, which means that you could make quite a profit from your investment.
2. Gold Hedges Against Inflation
No matter how challenging the times have been, gold has always been there to hedge against inflation. It is a stable asset, and even with the pandemic and the current political scenarios causing instability of the economy, gold has remained relatively stable.
As such, it is the best way to hedge against inflation and ensure that your assets do not lose value in uncertain times. Gold also has the characteristic of being scarce, which means that it can store value and keep your assets protected against inflation.
Whenever there is a more excellent supply of money in the economy, this usually results in inflation. However, gold cannot be in excess supply in the economy, which means that gold will be the default standard of value storage whenever there is a growing supply of money in the economy.
**You might also want to read: How to protect your 401(k) from a market crash
How Can You Invest in Gold
Investing in gold for beginners might sound harsh, but it becomes clear once you have the correct information. There are several ways in which you can buy, sell and make an investment in gold in addition to buying it the traditional way. Following are three ways in which you can start investing in gold.
1. Physical Gold
The most exiting gold investment for beginners is probably physical gold. You can purchase physical gold in the form of coins and bullion. It is an exciting way to protect and manage your gold in the way you would like. Additionally, investing in physical gold means not having to deal with a third party.
It would be best to think about the most secure storage for your physical gold once you have purchased it. A home safe or a safety deposit box are some of the best ways to protect your gold.
Additionally, when you store your gold in the right way, you will be able to maintain the condition and quality of the gold, which means that its price will be maintained and its value will remain stable over a long time. Gold in its physical form is one of the most liquid investments you can ever have.
It is easy to find a gold market when you have it in the physical form, and there are buyers that will be ready and willing to purchase your gold. You will also be able to get a reasonable price for your gold since the international prices are continuously updated, and as such, you will be able to trade in a transparent market.
This is one of the best investments you can make, but you should never forget to keep your gold safe and secure. Some companies specialize in keeping your gold safe, and they can prove to be quite helpful whenever you need to store your gold for a long time.
**Watch out for a common scam that take place with so-called Numismatic Gold coins
2. Gold Stocks
When you buy stocks in a company responsible for mining gold, you will have invested in something better than gold.
You will have invested in the very management of the mining process, which means that you will get better returns, and your stock investment will be more stable than the value of the gold itself. Whenever the mining company is well managed, they will be able to mine more gold at a lower cost, which will be more profitable.
As a stockholder, this means that you will be able to get dividends based on the average performance of the mining company and its annual output. Investing in gold stocks is an attractive option for anyone who wants to invest in gold.
It will give you some added benefits, which even beat investing in the gold itself. Your investment portfolio will also be more attractive when you have invested in gold stocks, and the performance of your investment will remain relatively stable in the long run.
You also get the benefit of earning dividends from your investment, which makes this an investment with profits. The stock value also increases, and you can buy it in bulk at a low price and sell it over time when the value has risen again.
It is a great way to invest in gold since you will be behind the entire mining and processing of the gold ore to the moment the physical gold hits the market. As such, this is a more attractive option than investing in physical gold, and as such, you will be sure to get good returns on your investment.
**You might not want to go at gold stocks alone, get guidance from real pros
3. Gold ETFs
ETFs are exchange-traded funds, and they enable you to enjoy the benefits of investing in gold without actually owning the physical asset. It is one of the more convenient ways to get exposure to gold and is also more flexible since you will not have to worry about the storage and maintenance of the physical gold.
The gold ETF is also more convenient as a form of investment since they follow the value of the physical gold, and as such, you are more confident that you will be able to earn a decent return on your investment. The investment is also stable and does not fluctuate over time.
Popular Gold Investment Strategies
A good strategy is essential whenever you need to invest in gold. It will ensure that your gold does not become volatile, and you will also be able to know how much to invest in the gold. It is not considered smart to have all your money invested into gold, or your portfolio is composed of gold only.
You should diversify your investments whenever you need to invest in gold. Following are some of the typical gold investment strategies that you can use to balance your investment in gold with the other investments you will be making.
1. Strategic Allocation
First and foremost, you must decide how much you would like to allocate to gold. Gold is mainly used to vary or diversify your portfolio and does not affect any other assets you have, such as bonds and stocks. As such, it manages portfolio volatility, and for someone looking to grow their portfolio, it is better if you invest a smaller amount towards gold.
This way, you will be able to manage the price swings in the short term without impacting the growth of your portfolio in the long term. Gold can help manage the volatility of your portfolio as an investor, and knowing how much of the portfolio should be in gold is essential.
2. Dollar Cost Average
Whenever you choose to invest in gold through ETFs and stocks, dollar cost averaging is another simple investment strategy. It means increasing your investment amounts consistently with a certain amount each time.
For instance, one can start investing $500 each month in a gold mining ETF. Usually, the amount you choose depends on how much you will be able to afford, and you can do this easily through a brokerage account.
You can also decide to automate the strategy to ensure that you can put in a certain amount each month towards your investments in gold. This will ensure that you have the money prepared by the time you need to invest.
You will also be able to make more regular investments in gold, which means that you will be able to increase your gold portfolio over the long run without making a single significant investment in gold. This is much easier for beginners and one of the ideal ways to invest in gold when getting started.
3. Gold IRA
Gold and other precious metals can be invested in your retirement account. A Gold IRA is a strategy that will combine your retirement account with actual investment in physical gold.
You can purchase the gold through a reliable custodian who will buy the gold for you and deliver it to a depository that the IRS has approved. It is a great option when you need to diversify your portfolio and ensures that you have a better retirement and enough investment towards a better future for yourself.
When you have gold as part of our investment plan, you will be able to preserve the value of your investments, and your assets will remain relatively stable in the long run. This is quite important since the instability witnessed in various places around the world will not affect you.
**Learn how to Avoid Gold IRA Scams here
Using the strategies that have been described above, you will be able to invest in gold without making it seem like you are moving to another continent or making a significant change in your life. The investment will also be easier on you, and you will be able to manage the amount you decide to allocate on the gold. Therefore the alternatives above can all be good gold investments for beginners to start out with.
With a good strategy, you will also be able to keep your investment portfolio well balanced in such a manner that you will be able to keep the value of your assets stable and protected from volatility and inflation.
No matter how bad things in the political and economic scene might be, investing in gold ensures that you can maintain the value of your assets and keep a well-balanced portfolio over time. The investment is essential and ensures that you can keep your future safer and more stable.
See Top-5 Gold Investment Companies (& Gold IRA Solutions)
Gold is the one asset whose value has been maintained over thousands of years. It is a safe investment asset for many people and part of many informed investors’ portfolios. Suppose you are still new to the concept of investing in gold.
In that case, you must have a good understanding of the different characteristics of gold and how you can use it as a means of stabilizing your investments even when the current times are economically unstable, volatile, and there is inflation. You can use different ways to invest in gold, such as physical bullion and gold coins, gold ETFs, and stocks in gold mining companies.
Considering how fragile things were at the time, this would be your moment to invest in gold. Buying gold and holding on to it will ensure that you are safer regardless of how bad the times get.
You will also be more confident of an assured future when you start to invest in gold from now. Hopefully, the information provided above will be an excellent guide to ensure that you know the options and benefits of each investment option even if you are a beginner.
Other than gold, cryptocurrency is another asset that might be a good idea to invest in, especially in these “unstable” times. Below are some good info that can help beginners in that subject aswell:
I hope you found this article on how to invest in gold for beginners and what different investments you could choose from, to be helpful. Please share your own experience in the comment section below! Also, if you got any questions about this I would be more than happy to answer them below!
I wish you success!
Michael, founder of Gold Retired.