The Way to Safe and Secure Investing – Gold Is the Answer!

6The first thing most financial advisors will ask a client is why they are investing. They will also usually how much time the client has before they think they will need the money. These two pieces of information will figure heavily in the kinds of investments a particular client is suited for.

When markets are volatile, and the standard advice doesn’t apply as consistently as it used to, financial advisors will inform many of their clients about profitable opportunities to invest in gold. How does gold help an investment portfolio?

How Hedges Work

A hedge is a way for investors to protect their gains in the market. One way to think of hedges is to think of insurance. If a stock position increases in value by $1000, the investor will naturally want to keep that gain. They certainly don’t want that same position to decrease by $1000 and wipe out their profit. So that investor might employ what is known as a hedge.

In the everyday world, insurance is a hedge. The purpose is to offset losses with accompanying gains. Futures contracts are one of the most popular hedges. Options are also a common way for investors to secure gains and try to avoid unnecessary losses.

One of the most powerful hedges is gold.

Gold as Insurance

Gold has always been a tremendously strong repository of value. Whether it is held in coins, bars or in other forms, gold maintains its value fairly consistently over time and also paces the rate inflation fairly closely, meaning that value stored in gold is likely to be far less vulnerable to the inflationary loss of buying power an equivalent amount in cash would be. These are some of the most profound gold investing factors for success.

When gold is established as a companion investment to a stock or bond position, or as a foundation-level position in a larger portfolio, it often will rise in value when other investments generally drop in value. Gold is considered a safe store of value, and demand for it often rises when other investments and classes of investments turn bearish. Gold is also very popular among currency investors who continuously look for profitable opportunities to invest in gold, as it provides a dual-strategy option of arbitrage against foreign demand and a hedge against exchange rate fluctuations, especially the currency native to the gold position.

Gold as Investment

Because it is a strong repository of value and is far less vulnerable to inflation, gold meets one of the most important requirements of a good investment. The other requirement is that an investment’s gains exceed taxes. Because gold is a value store, it is generally not subject to the same kinds of taxes as a more volatile stock or bond portfolio might be. Until it is sold, a gold position is likely to face few taxes at all, and if it is incorporated into a tax-advantaged account of some kind, any gains may avoid taxes altogether or at the very least mitigate them.

Avoiding loss of value through taxes and inflation is another of the many gold investing factors for success. Gold is not a growth investment per se, and it is not likely to produce dividends or regular payouts like a bond or a mutual fund might. What it does provide is consistent safety. Its very presence is an automatic hedge against riskier positions in other markets.

A Path to the Future

Gold has been a good investment for thousands of years. It is now used in a wide variety of high-technology manufacturing processes, and mining technology has never been more advanced. Anyone looking for a good way to build a safe store of value for their family and legacy would be well advised to consider putting at least a portion of their investments into gold. It is one part of an overall strategy for wise investing.

12 Immensely Useful Tips for Beginners to Invest in Gold Coins

5Many investors want to invest in gold as a hedge against fluctuating stock markets and an uncertain economy. The 2007 economic debacle made investors realize the need to diversify their portfolio by adding a tangible asset like gold.

There are many ways to invest in gold, like ETFs, jewelry, bars, but the most popular is coins. However, there are many pros and cons of investing in gold coins, and you must be completely aware about certain things before you make a vital investment decision. This Buzzle article lists down 12 tips for beginners who wish to invest in gold coins.

Follow the gold index
Whether it is buying or selling gold coins, you should be aware about the fluctuations in the gold market. You should also keep abreast of the prevailing gold index.

To diversify, invest up to 30% in gold coins
If you intend to invest in gold coins to diversify your investment portfolio, do not invest more than 30% of your entire investment sum. Also, try to invest a minimum of 10% in gold coins.

Decide the purpose of investment
Decide why you are buying the gold coins―as a tangible asset or for numismatic possession. This decision will dictate the amount of investment, type of coins and their value, and the returns on it.

Store the coins at a secure place
As gold is a tangible asset, unlike mutual funds or stocks, you will have to take special care about storing the same. You can utilize a safe at your home, or a gold vault or a safe deposit in the bank to store your gold.

Buy coins from a well-known brand
It is always better to buy a gold coin from a known brand as buyers are more likely to identify with it. You can go for South African Krugerrand Gold Coin, American Eagle Gold Coin, UK Sovereign, Canadian Gold Maple Leaf, Turkish Gold Coin, the Swiss Vrendi, etc.

Buy a coin that is in demand
Ensure that you buy a gold coin that has a market and is in considerable demand. This will help you get buyers easily for your gold coins.

Go for 22k or 24k only
Buy gold coins with a purity of 22k or 24k. The lesser number of alloys or other metal a coin has, the better price it will fetch.

Invest equally in pre-1933 and bullion coins
Look at your investment goals before you decide where exactly to invest your money. Ideally, a mix portfolio of pre-1933 gold coins and bullion coins is recommended for beginners.

Choose a reputed gold firm
To avoid falling prey to fraudulent schemes, it is a safe bet to choose a gold firm that has been around for more than a decade and is interested in imparting information to you from time to time.

Investing in coins is less risky
Investing in gold coins is less risky than gold futures contract where you can end up losing all your investment.

Always physically buy coins
While there are reliable companies who trade in gold online, you can easily fall prey to real-looking counterfeit coins. Hence, it is always better to buy it physically from established gold firms.

Research about the coins
Before investing in gold, conduct some basic research about the coins you intend to buy. You should also verify the size, mint origin, markings, weight, purity, etc. All this will enable you to make an informed decision.

Also, comparing the prices of gold coins with different dealers can help you get a better bargain. Hope you will make most of these gold coin investment tips for beginners.

Silver and Gold Investing

8It is currently very important for investors to consider buying both gold and silver. In September 2010, gold climbed to a record $1,296 spot price per ounce. Silver also continued its steady gain, reaching $21 per ounce. A financial investment source, ArabianMoney, predicts gold to gradually increase in value to $5,000 within the next three years. Because of the historic 15:1 ratio of the average price of gold to the average price of silver, the gradual increase in gold value could also result in a rise in the price of silver from $21 per ounce to $315 per ounce in three years.

Gold and Silver Versus Paper Currency

Gold and silver have become good investments thanks to a continually weak financial market and government action. The US dollar’s decreased value compared to the Euro and concerns of excessive printing by governments has forced many investors to invest in commodities that have a proven ability to retain value. Since August 2001, gold has risen in value by $900 per ounce and silver by $14.50 per ounce. Gold is expected to pass $1,600 per ounce by the end of 2011 and silver will continue to shadow its rise in value during a period where slumping global currencies have made buying gold and silver a good investment. By investing in gold and silver instead of paper currency, you can expect to see a larger return on your investment in years to come.

Factors that Influence Your Investment in Gold and Silver

In order to maximize the return on your investment in gold and silver, you’ll need to understand all of the factors that might affect the value of your investment. These factors include the daily market spot price, the type of coin or bar you’re purchasing, and external economic data.

The daily market spot price changes each day in accordance with supply and demand. For example, if the supply of gold or silver were to increase in one day while the demand decreased, the daily market spot price would decrease. The daily market spot price might also fluctuate depending on the location of the commodity exchange you look at. For example, the spot price in the US might vary from the spot price in Japan.

The type of coin or bar that you invest in will also have an effect on the price you pay when you make your purchase. This is because government fees usually cause the value of bullion coins and bars to be above the spot price. Certified rare coins are also more valuable than the spot price would indicate, simply because of their rarity. For example, the value of a proof American Buffalo gold coin is currently $1,500, which is 4-5% above the spot price of gold.

External economic data can also have a significant influence on the prices of gold and silver. Generally, the spot price of precious metals such as silver and gold will increase during an economic downturn. This is because, as stock and bond investments become less appealing, investing in gold and silver becomes more appealing. As more people invest in precious metals, the demand (and their prices) increase. It is wise to carefully watch external economic data such as stock indexes and the Dollar Index in order to plan the best time to invest.

Simple Best Way To Invest in Gold and Silver

3If you are looking to increase the viability of your long term financial portfolio, then precious metals should definitely be a part of the discussion. There are many options available to those who want to invest in precious metals. The gold and silver investment strategy that some of the best investors in the world apply to their own portfolios is now available to the average investor.

No matter your previous experience in investing in gold and silver, the potential for profit is better than ever. No matter what anyone tells you about the viability of precious metals in a bear market or in a bull market, the fact remains that good investors can utilize the market for precious metals in many different ways, especially when the vehicle for investing becomes easy to use.

Here are some of the simple ways that you can invest in gold and silver.

– Find a stable precious metals ETF and use it in a diversified, long term strategy.

Whether you have ties with a mutual fund company or not, an exchange traded fund will always be available for you to trade. The ETF gives you the same options as a single stock while providing you with the diversification that is usually only available to people who are investing in mutual funds. Placed into a long term strategy of diversification, the precious metals ETF provides the average investor with a way to get into the market for gold and silver without giving away any financial information to an outside entity for no reason.

– Invest in gold and silver bullion.

Although governments across the world have attempted to make investment in bullion more difficult because they wanted to create a monopoly for themselves, it is still very possible to invest in bullion for yourself. The process is much more defined, and it goes through the government in most nations, but it remains one of the most profitable ways to place gold and silver in your portfolio.

No matter how much trouble it may be, any reputable financial advisor will encourage you to take the time to do the research for obtaining bullion in your portfolio. If done to scale, the effort will have a great chance of paying off for you in the long run.

– Invest in gold and silver products.

Even if you do not want to do the research to invest in gold or silver bullion, you can still invest in gold and silver products very easily. Much of the world’s most valuable jewelry is made from gold and silver and still contains a high percentage of the precious metals in the product. Buying one of these products is almost the same as making a purchase of gold and silver bullion, with the added feature that the product can be used in day to day life.

For instance, many of the top investors in the world have made it a point to purchase watches from esteemed companies that are known to put high grade gold and silver content in their products. In this way they are able to invest in the precious metals, maintain the value of their investments no matter how the market moves, and create the added value of social prestige with the product that they have invested in. This example of watches is far from the only way that this can be done. There are all kinds of investment artwork, cars and other precious metal featured products that can be invested in.

In What Should We Invest: Gold Coins, Gold Stocks Or Gold Bars?

2With the languishing financial situation worldwide, money, stocks and bonds have lost ground in favor of commodities.

Large use goods like oil and gas still remain powerful investments opportunities, but, likewise imply greater risks as they are largely conditioned by the socio-economical and Geo-political factors. Under these circumstances, people turn to the genuine value of precious metals and, especially to the world-old trustworthy gold.

Nowadays, gold is largely considered the most secure asset. The central banks of the world, governmental reserves, large and small investors alike trust in this yellow glittering metal whether as a safe haven or sheltered investment. Although its recognition was not always as widespread as these days, gold has preserved at all times its purchasing power and unique capacity of storing value throughout troubled or peaceful times.

Nonetheless, there is a wide variety of gold investments on the present-day market. Investing in gold bullion bars and coins or in gold stocks are the best known and used means. To make things clear, there is an essential difference between investing in the metal in raw form (i.e. gold in bullion) and in gold mining shares. This variation translates into the basic disparity between the pair of concepts stability -solid value and, respectively greater risks – increased gains.

In other words, purchasing gold bullion coins and small bars represents the secure means for acquiring and preserving wealth. Their worth resides in the purity of the metal (99,9% being the best available) and its mass. On the other hand, the price of a gold ounce is directly connected with the inflation / deflation indexes and the balance between supply-demand. This means that whether the fiat value is losing power or gaining in popularity, you can rely on your gold possessions in any case.

The gold stocks are practically an investment in the business of the precious metal, which consists mainly in gold mining. Indeed surprisingly, the worth of gold stocks these days is up to a percentage of almost 500% in comparison with their outlay three years ago. Thereby, gold shares are rather a volatile domain that primarily addresses the expert financiers, who are in permanent liaison with the existing and prospect trends on the global gold market and, also capable to assume potential larger losses.