How to Invest in Gold for Beginners

For hundreds of years, gold has had value as a currency, jewelry, industrial and manufacturing material. Many see gold as a viable alternative to traditional stocks and bonds, especially at times Market volatility And Inflation.

Additionally, gold is often seen as a safe haven for your holdings during turbulent times. During the COVID-19 pandemic, gold prices rose above $2,000 per ounce in August 2020, up 35% this year. The Washington Post Report

Fortunately, there are several ways that a beginner gold investor can start investing. Get started by requesting a free asset protection kit to learn more about this unique investment opportunity.

How to Invest in Gold for Beginners

Here are four different gold investments to consider for your portfolio.

Gold IRA

if you want Diversify your retirement portfolioYou can transfer a portion of your existing Individual Retirement Account (IRA) to one Gold IRA Without any tax implications. Like a traditional IRA, your money grows over time on a tax-deferred basis.

Alternatively, you can choose a Roth Gold IRA that you will fund with after-tax dollars. As such, you will not be taxed on the distributions you receive during retirement. Also, if you run a small business or are self-employed, a Simplified Employee Pension (SEP) Gold IRA can be a viable option. You can set up SEP Gold IRAs for yourself and your employees.

May be early investors convenience Work with a reputable Gold IRA company to set everything up to comply with IRA regulations. They can help you appoint an IRA-approved custodian and depository to store physical gold in your IRA. Learn more about getting started with a Gold IRA now.

physical gold

Physical gold is available in many forms, such as gold bars and coins. You can enjoy the look and feel of physical gold, but you need to store and insure this precious metal.

The return on investment (ROI) with gold depends on whether the value of the asset rises or falls. Alternatively, you can invest in a gold mining company or other gold business, so that your profits can depend more on the performance of the company than on the price of gold.

You can buy real gold in a number of ways, including from reputable gold dealers, private collectors, and pawn shops. The price you pay will depend on the purity of the gold in the bar or coin and the price of gold at that time.

As a point of reference, gold bullion is usually sold in single or 10-ounce bars, where gold is currently floating. About $1,800 an ounce. For its part, it can be easier to invest in gold coins, which are available in quantities of one ounce or less.

Gold futures

Gold futures another way Invest in gold, although it can be very risky for beginning investors due to its speculative nature. With gold futures, an investor and seller enter into a contract in which the buyer agrees to buy a specified amount of gold at a specified price and date, regardless of market conditions.

That means if you hold the investment and the price drops right before the contract expires, you could lose much or all of your investment.

If you are considering investing in gold futures, you must understand how it works and the risks involved. In fact, the brokerage firm you work with may require you to sign a form before opening your investment account in gold futures.

Gold Mining Company

If you are new Gold investment, you can enjoy an introduction to stock market investing by owning some stock in a gold mining company. You can profit if the price of gold rises and the company’s stock rises as its gold holdings become more valuable.

Your gold investment can also increase if the company produces more gold or can mine at a lower cost. Conversely, if the company mismanages its operations, you may lose money.

Exchange-traded funds (ETFs) are a popular way for beginners to start investing in gold. With ETFs, you can invest in one of 36 ETFs in the US market, each exclusively holding gold mining companies. Gold ETFs can give you exposure to gold and add diversification to your portfolio.

Whether you invest in gold mining companies individually or through an ETF, you can buy these investments through an online broker.

There are several gold companies that can help you get started investing in the precious metal. Use the table below to explore some options.

Bottom line

Before you begin the process, understand that investing in gold is not usually a way to grow your money. Over time, the stock market typically outperforms the price of gold.

Instead, owning some gold is a way to diversify your portfolio (5% to 10% of your portfolio at most). If you want to invest in gold, consider consulting a financial advisor who can help you determine how to incorporate gold into your overall investment strategy.

Goldco’s experts can also help advise you.