Investing can be one of the most beneficial opportunities you can take advantage of in the new year. Investing in gold is one of those dependable strategies which investors often employ to help buffer and diversify their portfolios. While this is by no means intended to present financial advice, there are a few reasons people like to invest in gold and other precious metals. Gold, in particular, is a viable option for many people. It’s possible to invest in gold in a number of ways: through ETFs, gold and silver mining futures, coins, bullion, stocks, and more. Then there’s the option of purchasing physical gold as a bar—something that tends to supply great results at times. Here are a few benefits of investing in gold bars
Gold Goes Up
When everything else decreases in value during a downward market trend, gold is a much safer bet. Why? Because it tends to soar when everything else falls! Investing in gold bullion, bars, EFTs, and other types of gold is something about the stock market having it. Historically speaking, gold has a tendency to go up when stock markets fall. In the last 50 years alone, it’s consistently seen higher gains when other stocks go down. When gold does suffer declines — as it did during the Great Depression and 2008 Financial Crisis — it almost always comes back up drastically, with extremely high returns. It’s kind of a long game, however, which is why investors tend to hang onto their gold investments through thick and thin.
Gold Offers Variety
Gold, as an investment, has something going for it than some other investment types: it comes with a lot of options! Here are just a few of them:
Physical gold – Gold coins, bullion, or bars are the types of physical gold that make the best investments. They’re sturdy, easy to store, often certified, and can potentially offer high returns when sold. A one-ounce gold bar can be a hedge against inflation and offer substantial returns under some circumstances. Sometimes people invest in gold jewelry as well.
Gold stocks – these are the most basic type of gold investments, in the form of your typical stock.
Gold mining futures – a type of exchange traded gold buyers forge a contract to take delivery of a predetermined gold quantity at a certain price, at some point in the future.
Exchange-Traded Funds – these track the price of gold and are usually backed by physical gold. Shares of an ETF represent a small portion of the gold backing it.
Gold Offsets Other Risks
You’ve likely heard that gold has the remarkable ability to offset other potential investment risks. This is true, for the most part. Think of it as more of a safety or safe haven for investments, rather than a way to miraculously prevent risks. Think about the opportunity costs involved and how the liquidity of your gold investments might affect your returns. Also consider storage concerns for physical gold. It’s wise to insure your gold and ensure its authenticity. Be absolutely sure to understand how gold investments are taxed. This knowledge and a solid investment are a great way to start taking advantage of gold’s latent abilities to help reduce risk in an uncertain world.
Selling Gold is Easy
Minted with .999 or .9999 fine gold, one-ounce physical gold bars offer plenty of perks. They’re compact, elegant, and authentic. Look for a gold bar that has a letter of authenticity with it for the best value. While it’s possible to obtain gold bars (or bullion) in larger denominations/sizes, a one-ounce gold bar is one of the best investments. They’re accessible to any investor and readily complement other precious metal investments. A troy ounce is equal to 31.103 grams, making it slightly higher than a typical ounce (it’s roughly 1.097 ounces after everything is said and done). A gold bar fits easily in a display case or snugly in a safe (or vault). Best of all, when it comes time to sell, doing so is simple. Depending on where you acquired the gold bar, there’s always the possibility of having the mint buy it back. This is likely the most direct method. But there are plenty of other options, like finding a merchant who specializes in gold, finding a trusted gold buyer, selling them to another investor, and more. With a bit of research and some tenacity, you can sell your gold and reap the rewards of your investment with ease!
Gold Diversifies Your Portfolio
Gold is a great way to diversify a portfolio. Why? Because it doesn’t correlate to other assets. It kind of does its own thing. Prices don’t really fluctuate over time. When it falls, it usually rebounds significantly higher. The ROI can vary depending on a number of factors, but it keeps itself separate from your other Investments for the most part. Precious metals are a great way to diversify a portfolio, and getting started with gold is the first step into creating the best diverse portfolio you can for your own investments.