Many investors are embracing gold to diversify their portfolios. Experts suggest having a modest allocation of at least 2% to 10% to enhance the performance of the investment portfolio. Historically, gold has always been a tool for wealth insurance. No matter what circumstances occur in a country whether it is a severe economic crisis, gold prices remains unscathed. In fact, the prices of gold tend to increase once there are economic uncertainties. However, before you invest in physical gold, it is essential to understand relevant Gold Bars information so as not to commit costly mistakes.
How to invest in gold
There are several ways to invest in gold but before you make an investment, you have to consider the options in the market and your goal in buying gold whether it for long term or short term security for other financial assets. You have the option to buy gold bars or gold bullion coins or you can buy stocks that are backed by physical gold or gold-linked investments that are actually related to gold price but do not include physical ownership of gold. ETFs or exchange traded funds are investment tools for the sophisticated investor. ETFs are sold and bought in the stock exchange in the form of shares. Gold-linked investments include gold mining shares and futures. If you are not particularly knowledgeable with stock trading, it would be a better option to stick to gold bars and coins and have them held securely through a depository.
Are you investing in gold bars?
There are many reputable dealers all over world where you can get a fair price for gold bars. You can go to New York, London, Toronto or Sydney to buy gold bars or the smaller fraction called gold ingots. You can also buy online since most of the dealers of gold have their websites with corresponding prices of gold updated daily. However, if you have enough money to invest, it is better to buy 1kg gold bars because it is more cost effective than buying gold ingots. The price of a gold bar is only a few percent higher than the price of gold. Gold ingots are usually sold at 50% higher than the spot price. If you eventually decide to sell your gold ingots you have to quote a higher price because you have to recoup the 50% premium to achieve a profitable sale.
How to protect the value of your gold investment
If you buy a 1-kilogram gold bar, have you made plans on storage? Ideally, you should store your gold bar in a depository to ensure its safety. This will ensure that the value of your gold bar is protected because it does not leave the professional circuit. It also makes resale very convenient because there is no movement of your gold investment. Always remember that the value of gold bar or gold ingots can be compromised once they leave the professional circuit. Besides that, having physical possession of your gold bars inside your own home is a temptation to thieves.