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Gold Investment Advice5 min read

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Gold has been an excellent investment because it holds its value better than many other types of investments. Even though gold is a great investment, it can be difficult to decide on how much gold to invest in, if gold is right for you, where to make your purchases, where to store it, etc. This is why it is important to put some thought into what your goals are and how gold will fit into those goals. 

Before you decide to tackle gold for your investment portfolio on your own, consider this Gold Investment Advice

The Best Asset is You

Nobody is going to know what you need for your investments more than you do. It is important to sit down and think about what it is you want out of these investments. Going directly to a financial advisor might put you at risk for high-pressure sales tactics, especially if they know you’re unsure about your goals. 

Why Should I Invest in Gold?

Gold has long been a valuable asset and has been traded for thousands of years. I mean, think about it, gold and other precious metals have been around long before stocks, bonds, and even paper money have been in existence. This is why it is a sound addition to your investment portfolio. 

If you are on the fence about investing in gold, consider these reasons why you should:

  1. Preserving your wealth – Gold stands out as superior for holding its value against other types of currencies. This means $25 in gold is more valuable than $25 in paper money, as paper currencies will be affected by inflation, world events, etc. 
  2. Hedge against inflation – Gold has traditionally been a way to avoid inflation and declining currency values. In fact, the value of gold will often increase as the value of a dollar decreases. 
  3. It’s a safe haven – Our modern economy is full of pitfalls and uncertainties. Gold isn’t affected directly or as drastically by economic and/or political forces and acts as an insurance policy in adverse economic conditions.
  4. Diversity – Gold is often seen as a good way to diversify your investment portfolio and prevent investment-related risks and volatility. 

Choosing the Right Investment Strategy

Gold is not only an investment option with an extended history, but it also comes in a variety of forms and is easily accessible. The most common types of gold investments you can make include:

  • Physical bullion, bars, jewelry, and coins – This is the easiest and often most affordable way to begin investing with gold. If you want to make the soundest investment, try gold bullion. Gold coins are widely available, but you must be sure that their gold content is exactly what the seller is claiming to avoid being ripped off. 
  • Stocks, EFTs, and mutual funds – If you’re an investor with a larger amount of capital and you don’t want to bother with physical gold, you can go virtual.
  • Gold Derivatives – Storage of physical gold can be difficult for some investors which is why gold derivatives are another good investment option. For example, derivatives rely on current gold prices in the market, making it a greatly diversified asset to include in any portfolio; CFDs give the trader an option on the length of their investments (short or long-term), allowing them the ability to earn profits from both sides; or futures which are speculative, thus the trader puts bets on future gold prices. 

Principles for Investing in Gold Bullion

Investing in gold doesn’t need to be scary and instead of getting frustrated, follow one or more of these principles for investing in gold bullion:

  1. Buy in bulk – If you can swing it, buying gold in bulk is really the best way to get a good deal and maximize your profits. Don’t go spending your entire life savings–that is a very bad idea! Instead, save 3-6 months’ worth of money for expenses and then decide how much gold you can purchase comfortably. 
  2. Trading – Not many people outside of the finance industry would be comfortable working as a trader. But, if you are motivated and dedicated, you can successfully increase your wealth through trading. Because this is a difficult option, those that can form clear rules before trading, stick to their rules while trading, and not get emotionally attached to the market are going to have better success.
  3. Average dollar accumulation – With this option, you will purchase precious metals at regular intervals. Because regular purchases tend to have lesser value than buying in bulk, you can use cash set aside from your monthly earnings to purchase your precious metals at varying set prices as gold fluctuates. 

Gold Storage

Where you want to store your gold bullion will depend on you and the amount of gold that you have in hand.

Home storage is great for emergency or temporary situations and for investors with a smaller quantity of precious metals. A private vault is a good option for larger quantities of precious metals.

Future Needs

Once you’ve purchased gold, your next thought should be, “What next?” This is why you should consider your future needs, including:

  • Need to sell – Emergencies happen and on those occasions, you may want to sell your gold quickly.
  • Quality of life – Is the purchasing of gold for your future affecting your present situation? It is essential to find a balance when investing and living your day-to-day life. 

3 Gold Mining Companies to Invest With

There are literally hundreds of gold mining companies out there that you can invest with. I narrowed it down to three top companies for your gold investment needs, which include:

  1. Goldco
  2. Augusta Precious Metals
  3. Birch Gold Group

Of course, you should always vet whatever gold company you’re choosing to invest with before you spend even one penny on gold. While we’d like to think that a company is doing honest business, sometimes that just isn’t the case, which is why I thought this Gold Investment Advice article would be useful.

About 

Edwin Cannon has spent his entire career in the financial industry and specializes in alternative investments and surviving marketing turbulence. He started My Retirement Paycheck to help educate consumers about retirement investment options that aren't typically introduced by advisors.