Frequently Asked Gold Investing Questions
You work hard to save your money for retirement, so investing in gold and other precious metals is something you don’t take lightly. We don’t either, and that’s why we have put together a list of commonly asked questions concerning investing in gold and precious metals.
Can you invest in gold?
Gold is a commodity, just like stocks or bonds, that you can invest your money in.
The value of gold can increase or decrease just like the stock market. There are many factors that contribute to this, such as the political environment, the supply and demand for gold, stock market performance, and currency depreciation.
By monitoring the current value of gold, you can keep a close eye on your gold investment. Choosing to hold onto or sell your investment is based on what you paid versus the current value.
Many gold investment firms have specialists and educational materials that can assist you with the ins and outs of gold investments.
Is gold a good investment?
Gold has historically maintained its value and is thought to be a profitable, sound investment option by many people. Gold is considered a port in a storm, with the storm being inflation, stock market crashes, or other calamities.
The price of gold usually increases when the stock market is down, providing you with a way to protect your portfolio.
Of course, gold can be just as volatile in the short term, much like stocks. However, gold has proven throughout history that it holds its value in the long term.
Another reason gold can be considered a good investment is the ease at which you are able to convert it into cash. Typically, your gold investment company can arrange a partial or full distribution. They will wire the cash to your custodian, who can then transfer the money to you.
The high demand for gold makes it a good investment. It’s a natural resource that is limited; there has always been and likely will continue to be demand for gold. That is reassuring to you as an investor – knowing that the value of gold will remain stable or even rise makes it a good investment.
No matter what type of investment you add to your portfolio, including gold, there are going to be risks. However, gold hedges against inflation and volatility and adds real inherent value to your portfolio.
Do gold investment companies only offer gold as an investment option?
While the title of our article refers to gold investment companies, it’s important to note that most of these companies offer other forms of precious metals you can choose to invest in. Gold IRAs can include silver, platinum, and palladium.
What forms does gold come in, and what other options are there?
Gold isn’t just a bar or a coin that you can physically put your hands on. There are many forms of gold, each with its own advantages and risks. Here are some of the other forms gold can come in:
Gold ETF and Gold Mutual Funds: ETF stands for exchange-traded funds. Gold ETFs are electronic forms of gold, similar to stocks in that they are bought and sold in the same fashion. The Bombay Stock Exchange and National Stock Exchange of India trade ETFs.
Gold Jewelry: 14k gold jewelry is another form of gold you can invest in; however, you may pay more than what the jewelry is actually worth, so it can be difficult to make money off of gold jewelry when you go to resell it.
Gold Certificates: A gold certificate is proof of ownership of a specific amount of gold that is handled and stored by a company.
Gold Miners Stock: You can invest in the stock of companies that mine and trade gold. Examples are Barrick Gold Corp. (GOLD) and Newmont Corp. (NEM).
Every form of gold has its pros and cons, so it’s essential to understand what exactly you are investing in. Make sure you are working with a reputable, licensed, and insured company that thoroughly explains all of your options.
Where can I buy physical forms of gold?
There are plenty of online dealers you can buy physical gold from. Do your homework to make sure that it is a reputable dealer that is well established.
You can also look for a local coin shop or bullion dealer to buy gold from. Make sure to know the current price of gold so that you are well informed when purchasing gold from a retailer.
When you are buying physical gold, it’s also important to know the spot price of gold bullion (physical, investment-grade gold) as an investor. The spot price is the cost of the gold plus the seller’s fees. You don’t want to pay such a high premium that you won’t profit from the gold you are purchasing.
Should my investment portfolio only include gold? If not, what percentage of gold should be included in my portfolio?
You should not invest solely in gold. Gold is a way to diversify your portfolio. By adding gold to your stock market, real estate, and other investments, you are less likely to be negatively impacted in the event of inflation or a stock market crash.
Most financial analysts and advisors recommend that gold makes up a maximum of 10% of your portfolio. The type of gold does not matter; you can choose to invest in physical gold, gold ETFs, or any other form for your portfolio. It just depends on what you prefer and the amount of risk you are willing to take.
There are also other factors to consider when deciding on how much gold you should invest in. Are you close to retirement and looking to take on less risk? Are you just starting your career and are willing to jump in and risk a little more?
It’s a personal decision that you will have to make based on your current situation and future needs.
Does gold lose value?
To keep it simple, no, gold will never lose its entire value, although it can lose a percentage of its value. History has shown that the value of gold has more often than not increased over time.
What is the average return on gold?
In 2020, the return of gold as an investment came close to 25%. The annual average price of gold has climbed continuously since 2015.
What is the highest price of gold in history?
The highest price of gold in history occurred in September 2011, when gold reached USD $1,921.41 a troy ounce.
How can I safely buy gold?
We have put together a list of tips to help you make sure you are safely buying gold:
- Choose a reputable, insured, licensed company to work with when buying and investing in gold.
- Consider the form of gold you are purchasing. Buying gold in its physical form is best since you can securely store it.
- Speaking of storage, make sure that wherever you store your precious metals, your company offers nothing but the best security.
- Choose easily liquidated gold pieces, such as gold coins.
- Buy gold with your savings rather than with credit, as gold prices are constantly shifting.
- Make sure to look out for fees, such as distribution charges or dealer’s fees.
Is now a good time to buy gold?
It’s a good time to buy gold, even during a recession or pandemic. Of course, you will want to pay attention to the price of gold before you buy it, but gold offers security against stock market crashes, inflation, negative economic trends, and more.
Will gold increase during a recession?
Gold typically increases in value during an economic recession. Investors flock to it as it is a tangible asset. It’s considered a shrewd method for preserving wealth when the economy is in flux.
When is it the best time to sell gold?
There are a few scenarios where it makes sense to sell your gold. First of all, if you need cash, you can sell your gold.
However, you might want to consider the following times as they are considered a great time to sell off some of your gold:
- When the US dollar is strong: When the US dollar is doing well, your gold can actually hold more value as a currency than as gold. That makes it a great time to sell your gold.
- When the US dollar is weak: On the other hand, gold acts as insurance against inflation when the economy is on a downward spiral. Gold is highly desirable during a recession and other calamities, making it a good time to sell.
We hope that our list of the top five gold investment companies will help you make the next step as an investor in gold.
While Goldco tops our list as the best gold investment company, there are many factors to consider. Everyone’s situation is unique, and your needs may require that you take a different route.
Perhaps you are looking to invest in cryptocurrencies. If so, Regal Assets may be the company for you.
Or maybe you are looking to invest in gold not to make money but to have financial security in the event of a disaster. Noble Gold’s Survival Packages are likely a great option if that’s what you are looking for.
No matter what your reason is for investing in gold, your investment needs to suit your needs. You should feel confident that your investment in gold is managed by a well-established, reputable company that will keep your gold secure and readily available for you to access.
We wish you the best in your pursuit of gold!