Gold Investment Options
Investing in gold can be a good hedge against inflation and uncertain times, since the price of gold often rises during times of economic chaos and uncertainty. If you do want to invest a portion of your portfolio in gold, you have a number of options, from the security of physical gold to the ease of buying an exchange traded fund that tracks the price of the precious metal.
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Physical Gold
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Many investors prefer the security of physical gold, and there are a number of ways to invest in the actual metal. You can purchase gold content coins, which are priced primarily on the actual gold they contain. You can also purchase gold collectible coins, whose value is determined by a a combination of their gold content and their value to collectors. The value of these collectible coins can vary quite a bit, so it is a good idea to educate yourself about the coin market before you invest. You also need to be aware that the markups on both gold content and collectible gold coins can often be quite high.
Gold Mining Stocks
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When the price of gold goes up, the value of companies that mine that gold tends to go up as well. If you are looking for a way to profit from a rise in gold prices, buying gold mining stocks can be a smart strategy. You can use the stock screening tools provided by your brokerage firm to filter for companies involved in the gold mining business. You can also use the brokerage firm's research tools to evaluate the financial health of each company and choose the ones best positioned to profit from a rise in gold prices.
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Gold Mutual Funds
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Most major mutual fund companies include at least one gold or precious metals mutual fund. These funds typically invest in a number of different stocks and securities, each one designed to profit when the price of gold rises. You can get information on the mutual fund holdings, as well as fees, expenses and performance, by reviewing the most recent annual or semi-annual report.
Exchange Traded Fund
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If you want to track the price of gold directly and make money when the price of the metal goes up, you can invest in an exchange traded fund that is directly tied to the price of gold. One of the most widely used exchange traded funds trades, naturally enough, under the ticker symbol GLD. One advantage of an ETF is that you can buy and sell it in real time throughout the trading day, and that can be a big advantage in a fast-moving commodities market.
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References
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