What history has shown in the past that every time the world faces great turbulence, like the ones caused by the covid-19 pandemic, people to turn to invest in gold. The clear signs you should consider investing, besides the pandemic, are the turbulences in the economic sector – currencies like the British pound dollar’s value tend to go up and down, the value of the oil in the global market suddenly drops down, and so on.
If you have been thinking about investing in gold, this might be the right time. But, for first-time investors their things to learn before you decide to invest. Ways to invest your money in these precious metals are many, but each of them comes with certain advantages and disadvantages important to study before you invest, as Goldco review suggests.
When it comes to the most important facts about gold, you should be aware of, this guide will tell you all about them. Keep reading to find out.
1. The difference between gold coin and gold bullion
When reading the news about the gold prices many would think that if they own a couple of pieces of golden jewelry, it is the same as owning gold coins or bullions. They are right in one fact, and that’s that gold is gold, but investment gold does not include jewelry. This kind of gold s only for bullions and coins.
Regardless of what you buy, you will not go wrong. It is gold, after all, but you’re buying it for securing your assets from unexpected risk. In this case, it does not matter whether your investment fund will have one or the other, or both.
Even though the differences are small, maybe a concrete case will make you decide to buy one or the other. These cases are usually referring to the prices. What buyers want to achieve is to save as much as possible. The prices of the coins and bullions can differ, and then this is what will eventually make you decide. For example, the bigger the weight the lesser the price. If you’re aiming to buy bullion of 100 grams, it will cost you less than two bullions weighing 50 grams. It can also happen that the prices of bullion can be lower than the coins, because of the weight.
2. Golden jewelry is not a good investment
As we already mentioned in the first point, it is not the same to own a certain amount of gold jewelry such as necklaces, rings, earrings, watches, and coins or bullions. The advantage of this type of gold is not only the value in the material but also the esthetic function- you can wear on special occasions as an accessory. Although it is made of gold, most often the metals used in making it are not pure, which means that once you decide to sell it you will not get the price you were hoping for, the one you would get for bullions. At the end of the day, this kind of investment doesn’t pay off.
3. Indirect investments are also an option
If you’re not up to owning gold yourself, you can also consider alternative, indirect investments in this metal, such as investment funds or mining company shares.
Because of the interest of the small investors, many fonds actually take part of their capital to invest in gold or other precious materials. By investing in such funds, you can profit by the rise of the price, without having to physically own the gold. These investments do have their flaws as well, for example, comparing to the rise in the prices on the market the yield will be lower. Plus, each fund has different fees for their services. All these fees can significantly decrease the yield of your investment.
The advantage of investing in mining shares is the possibility to profit even when the price goes down, because miners sometimes find other precious materials, aside from gold (copper, steel, aluminum, and many others). The flaw of this investment is the dependence on the prices of the shares and business results of the mining company you chose to invest in. Even when the prices are growing, the business results of the mine or the company mining can be bad which will then influence your income.
4. Your investment should be kept safe
Once you purchase your gold, it is very important to consider some safe place for keeping it. You might have a safe of your own at home, but ask yourself will this be a good idea. It could attract burglars. The ideal solution to this is to hire a safe service from a bank, for example. Simply because banks already have a developed method on how to store your assets. Safes, where they are kept, are usually not located in one place, but rather in a couple of different secret locations and under constant surveillance of the banks. The bullions or coins you place for safekeeping are still entirely owned by you, and you can access them only with a prior announcement to the bank. Only people authorized by you can access it.
If you prefer to keep your assets close to you, while providing them with maximum safety, then this is your choice for storing the gold. Some services even include the delivery of the assets by professionals in the field of security, in case you might need them.
5. Is it fake or real?
In the past, there have been many scams involving fake gold bullions and gold certificates. Each piece you buy will have a certificate that goes with it, be 100% sure it’s not a fake before you buy it. This risk is also connected to investing in gold certificates, which is why you need to sure the person selling you is not a fraud.
2020 being a year to remember, by the global turbulences, has influenced the rise in the price of gold. It has never been this high. And after what has happened in the USA presidential elections many political experts predict that the price will only continue to rise. Making this a perfect chance for investing.