Buying gold is a crucial step in your investment and retirement plan and hence you need to know the right way to go about it. In this post, you will learn the key strategies you need to employ to become a successful gold investor.
Gold is one of the oldest trading commodities and can be bought in many gold selling places. The precious metal has been used as a store of wealth as well as for exchanging goods and services for centuries. This is due to the several benefits associated with owning and transacting in gold. Aside from its relative scarcity, the metal cannot be manufactured and hence is not readily impacted by market forces. It has a low volatility, with its value remaining constant for significant periods of time. To take advantage of these benefits, an investor needs to know how to buy gold. This is because the key to getting the most out of the commodity is suing he right strategy to purchase it. In this post, you will learn how to go about it.
1. Timing is Everything
Investment is like a game of poker. There are times when you have to keep your cards close to your chest and others when you need to play as aggressively as you possibly can. This applies to all kinds of businesses, including investing in gold. You need to time your transactions very carefully to ensure that you get the most out of it. This means you need to identify when to buy gold at low prices. Although not as volatile as currencies, the prices of gold also fluctuate in response to the outstanding factors in the market.
The best strategy to employ is undertaking a careful analysis and monitoring of the market to anticipate any dip. When this actually occurs, take full advantage of it to purchase the quantity of gold that you want. For those who are buying them as a long term investment, this can save you a great amount of money. Likewise, those who are purchasing them to resale at a later date will reap a greater profit as you could do so when the prices rise once more.
2. Decide What Form You Want Your Gold
Just like when and how to buy gold, another thing that you should seriously consider is the form of gold you intend to purchase. This is due to the fact that they are a wide array of different gold products that you can buy as a store of your wealth or as an investment for reselling. Before selecting one, it is also important to recognize that it will impact how they are handled and stored. You have to establish whether you have the means to manage them. There is no point in investing in the metal and then losing them due to mismanagement.
One of these is gold coins. It is arguably one of the oldest ways in which gold has been stored. Originating in ancient times as a form of currency, they have continued to be minted and can be bought in most countries as legal tender. They come in different denominations based on the quantity of metals used in minting them. The ones that are of higher value contain more weight than the cheaper ones. They are easy and convenient to purchase and can be obtained in small quantities. They are, however, small and can easily get lost.
Gold bullion bars are also commonly bought by those who intend to invest in the precious metal. In fact, it is arguably the best option if you intend to buy a large quantity. The bars are either rectangular or trapezoidal and weight their value in gold. Their popularity is mainly driven by the fact that they are not only easy to transport but also to store. You may decide to keep them in a safe within your property or entrust them to a bank for safekeeping. Regardless of which option you go for, investing in gold bars is never a bad choice.
The gold you purchase does not necessarily have to be in a physical tangible form. This is because the rise of online trading has facilitated the sale and purchase of gold as Exchange-Traded Funds (ETFs). These are securities that you invest in are traded just like common stocks. Their prices fluctuate throughout the day as they are bought and sold. Investing in them is advantageous in that they can be easily liquidated if you foresee a big market dip. However, they are not the best option for those who take pleasure in owning gold in its actual physical state.
3. Settle on the Quantity You Want
Firstly, you need to know the best ways to buy gold. Since it is a rare precious commodity, many people often make the mistake of purchasing too much gold. On the other hand, there are those who are still skeptical of investing in it and are unwilling to buy it in sufficient quantities when they have the chance. Regardless of which side of the pond you fall on, these are mistakes that you should never make. The beauty in investing in gold is buying them an amount that will benefit you the most.
If the prices have dipped and you are in a position to purchase more gold, there is absolutely no reason why you should not buy it. However, one should be careful not to store their entire wealth in the metal. Any wise investor knows that diversification is the key to success. You should therefore invest in other areas of the economy too. You also need to diversify in the kinds of gold products you purchase to develop a sustainable portfolio of coins, jewelry, bars, and ETFs if need be.
How do you make profit from your gold once you have it? Wealth manager Minesh Bhindi has developed some advanced techniques on how to get up to 26.4% annual returns on your gold, and he shares them free in this webinar. Click on the button below to sign up.