Gold is always a good investment, let’s see some tips on how to invest in gold…
Investing in gold has become very popular in recent years. Most of our governments are in debt, the more, the states print new banknotes; this reduces the value of money and increases the value of gold.
For this reason, most investors have gold as a hedge against inflation and in the event that collapses the entire financial syste
m – the gold still retains its intrinsic value -.That’s why is a good thing to invest in gold…
Historically, gold has been bought as a hedge against any economic crisis.
When the price of gold reached again high prices, many investors are ready to bargain gold. Of course, there is no guarantee that gold will continue to appreciate in value, but if you’re looking to start investing in gold, here we explain a few ways to do it.
INVEST IN GOLD: Owning physical gold ingots, coins, jewelry
One of the most common ways to invest in gold is to own physical gold in the form of gold bullion or gold coins. There are various types of ingots, and vary in weight and size. Some are sold to the weight of one gram and worth a few dollars, others range from 10 ounces to 100 ounces, kilograms in 1000, to the traditional 400 ounces.
These gold bars are purchased mainly from traditional investments of large companies. Investing in gold coins is the alternative. The coins are valued based on their weight and their rarity. Some coins are worth more than others, because their movement was restricted. You can find gold coins from collectors and dealers of coins.
In some countries, such as in India, people still prefer the older method: buy gold in the form of jewelry. Besides being the easiest to buy gold, also gives great satisfaction to the women of the family, they have in fact love jewelry – is there any man who would dare to prove otherwise? – But the investment in jewelry, in our opinion, is not the best option. First when you buy jewelry you have more spending, about 10-20% of the actual value. In addition, at the time of selling the gold jewelry there may be price losses due to non purity of the material, owing to the degradation of the jewel caused by wear and damage. So it is difficult to recover the entire value of gold by selling jewelry. Unless, you can not keep the jewels in perfect condition.
INVEST IN GOLD: Financial gold
The most common way to invest in gold is to buy financial EFT (Exchange Traded Funds), it comes to funds whose shares are traded on the stock market in real time as shares.
Transaction costs are lower and the operation as a whole are easier. However, if there is a financial crisis it occurs you do not own anything and is not as safe as having physical gold.
Another way to invest in Financial gold is buying shares of a company mining gold (mining companies). As the price of gold rises,you also gain. But there are risks that can adversely affect the mining stocks, such as: poor management, bad weather extraction, natural disasters, accidents, etc.
All of these factors can greatly affect negatively the cost of mining stocks.
The future is the instrument of the speculator. Futures are financial agreements to buy or sell a specified quantity of goods at a time agreed compulsorily and at a price set at the time of the contract. People who invest in futures are mostly speculators who take risks for the ‘rise or fall of the price of gold. They buy gold futures when they anticipate increases in the price and sell when it is expected to fall. The profit potential can be very high, as well as the risk of losing everything.
An option contract is like a futures contract: a financial agreement to buy or sell a specified quantity of goods at a specified date and for a fixed price established at the time of the contract. The option provides the ability to get big profits, just like gold futures, but also has great risks. Unlike the futures contract as the future, in ‘option the right to buy or sell can be exercised at any time before the expiration of the option, the option holder can choose not to buy or sell if the price of nonferrous it is convenient for him.
For novice investors who seek to enter the precious metals market to invest in gold, we recommend to stick to less risky methods, such as the purchase of physical gold or buying EFT. Gold futures and options are not for the average investor.