Thinking about investing in a commodity? Gold might be a good idea. In fact, in 2020, the return rate for gold reached about 25%, meaning that if you invested $1,000 in gold, you could have earned back a total of $1,250 on your investment.
However, investing in gold isn’t as simple as buying a brick of gold and then selling it online somewhere. It’s also not as simple as purchasing a lot of gold coins. There’s an art and a science to investing in anything, and that applies to gold too.
If you’re interested in everything there is to know about how to invest in gold for beginners, though, this guide is for you. Here’s what to know so that you can make wise investment decisions.
What Is Investing in Gold?
When you hear the word "investing," chances are good that you think of stocks and bonds. But there's another type of investment that can provide stability and peace of mind: gold. Investing in gold can take many forms, from buying physical gold to investing in gold-mining companies.
Some people believe that gold is a good investment because it has intrinsic value and is a limited resource. Others view gold as a safe haven in times of economic uncertainty. No matter what your reasons for considering gold, it's important to understand the risks and potential rewards before making any decisions.
With a little research, you can decide whether investing in gold is right for you. But first, here’s why investors like gold as a commodity investment.
Why Investors Like Gold
So, why do investors like gold? There are a few reasons. First, gold is a physical asset that can't be created or destroyed. It has real value, unlike paper money, which can be printed at will. Likewise, gold is portable and easy to store. You can have it in your possession without anyone knowing, unlike stocks or other investments.
And finally, gold is liquid, meaning you can sell it quickly if you need to. Lastly, gold is a hedge against inflation and economic turmoil. When the stock market crashes or when currencies collapse, people always turn to gold. That's why investors like gold; it's a safe haven in unstable times.
Gold Investment Returns & Risks
Historically, gold has performed quite well as an investment. Over the past 10 years, for example, the price of gold has more than doubled. And while the returns on gold can be volatile in the short-term, over the long run it has been a relatively stable investment.
Gold is also seen as a safe haven asset, which means that it tends to do well during periods of economic uncertainty (yes, like the times we’re experiencing right now with inflation).
Of course, no investment is without risk, and there is no guarantee that gold will continue to perform well in the future. But for investors looking for exposure to precious metals, gold can be a good option to consider.
Some of the disadvantages of investing in gold include the fact that gold coin values can vary widely based on condition and rarity, so unless you're experienced, it's advisable to seek professional advice before making any gold investments.
Other risks include liquidity risk (the inability to quickly sell your gold when you need cash) and storage costs (either paying someone to store it for you or storing it yourself in a secure location). When weighing gold investment returns against these risks, it's important to consult with a financial advisor to get a sense of whether gold is the right investment for you.
Is It Safe to Invest in Gold Now?
With all of this in mind, is it safe to invest in gold now? As mentioned, gold tends to perform well during times of economic uncertainty. Currently, inflation is so high that economists are worried about a looming recession.
And while that’s not great news for the general population, it can make for the perfect time to invest in gold. In fact, Jim Cramer told CNBC that he recommends owning a bit of gold “as insurance against the unknown.” He sets aside 5% of his entire portfolio for gold-related investments.
How to Invest in Gold
Are you convinced gold is a good investment for you? Great! Now, how do you start investing in it?
First, it's important to understand the different ways you can invest in gold. You can buy physical gold, purchase gold shares or ETFs, or invest in gold mining companies. Each option has its own risks and rewards, so it's important to do your research before making any decisions.
Second, consider your investment goals. Are you looking to protect your wealth from inflation? Are you hoping to cash in on gold's rising value? Or are you interested in long-term growth potential? Answering these questions will help you determine which investment strategy is right for you.
Finally, don't forget to diversify your portfolio. Gold should only make up a small portion of your overall holdings, as it can be volatile and is subject to market fluctuations. By diversifying your investments, you'll be better positioned to weather any storms that come your way.
Where to Buy & Sell Gold Coins Online
Ready to buy and sell gold coins online? The cheapest way to buy gold is to find a reliable site offering you the ability to browse prices and learn about what you’re buying before you make your purchase.
Things to look out for in a company you’re considering purchasing from include fast shipping, fair and reasonable prices, and transparency. Look for an A+ BBB rating as well and ensure that you’re a member of the Certified Coin Exchange (CCE).
Ultimately, you’re looking to buy gold coins from a trusted source, so be sure to read reviews about the site you’ll be purchasing from just to ensure they’re legit and trustworthy.
Invest in Yourself
Learning how to invest in gold is a great way to diversify your portfolio or to dip your feet into investing. Whether you’re buying and selling gold coins online or investing in options in commodities markets, it pays to educate yourself before making any sort of investment.
And, don’t forget to invest in yourself! How? By ensuring you’re shopping with a debit card that works for you. The Cheese Debit Card does just that.
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