Investing in gold bars can be a great long-term hedge against inflation. Gold will also serve as part of a solid diversified portfolio, contributing support and volatility where other investments might lack. There are basically two ways of investing in gold- purchasing shares in gold mining companies or investing directly in bullion bars or coins.
In this article we look at both of these options, and see what advantages and disadvantages they bring. It’s a good idea to think about the reasons why investing in physical gold might be a good idea if you’re uncertain as to whether this is a good investment strategy for you.
- The first reason why it’s a good idea to consider investing in physical gold is because it’s not like other forms of investing. For instance you can invest in shares and stocks and get little if any growth. With a gold investment you can enjoy gains which eventually grow to be substantial. You don’t have to wait for an official rate of inflation or growth. Your physical gold investment will always keep you ahead of the game.
- Another advantage is that there are many different routes to take with this form of investing. A very popular route is in a self-directed individual retirement account (SDIA). An individual account allows you to invest solely in precious metals by choosing what you want to buy and managing your own portfolio. Many insurance companies offer self-directed individual retirement accounts; if yours doesn’t, you can invest online through a reputable company.
- Investing in gold investment retirement accounts gives you total control over how your portfolio is managed. In other words, you can decide how your money is invested and when to pull it out. If you want to increase your portfolio and take more risk, you can do so. If you don’t feel comfortable taking risks, you can simply close your account.
- Investing in gold gives you the ability to diversify your investment portfolio. Most traditional investments are concentrated in one or two industries. With a gold IRA, you can invest in almost any form of investment that offers high returns. You can invest in stocks, bonds, precious metals, foreign currency, and even options such as ETFs (exchange traded funds).
- Finally, the advantage to investing in gold is that you don’t have to open an IRA account to invest in stocks and bonds. When you invest in these types of traditional IRAs, you have to open an account and purchase the stock or bond. Then you have to wait for tax time to determine the gain or loss and rollover to your new IRA account. This could take as long as several months and is often tedious.
- In addition to the benefits that I mentioned above, investing in physical gold is also considered to be one of the best methods of investing in precious metals. This is due to the fact that you don’t have to worry about the counterparty risk associated with purchasing gold bullion. Counterparty risk refers to the risk that a counterparty will not deliver the asset on the agreed date. For instance, if a warehouse is owned by a company that supplies gold supplies to a retailer, if the retailer does not ship the gold on the agreed date, then the purchaser will be stuck holding the bag.
With all of the benefits associated with this type of investment, it makes sense that investors would turn to tangible investments for their gold storage needs. If you want to invest in gold for this purpose, you will want to think about investing in bullion bars or coins. The beauty about these types of investments is that you can invest in numerous coins without having to open a gold account or purchase precious metal bullion. Investing in coins is a relatively low risk method of storing your investment portfolio. In addition, you can invest in precious metal by purchasing smaller numismatic coins.
Whether you are interested in buying Canadian Bullion Gold bars or coins, it is important to remember that there are inherent risks associated with any type of investing activity. It is important to do your own research and determine how you can reduce those risks. It is also important to keep in mind that if you do happen to lose all of your investment money when investing, there are several methods for getting your money back. Keep in mind that if you are planning to make physical gold purchases, you may need to take delivery of the gold yourself to ensure that you receive full value for your purchase. Regardless of whether you choose to invest in precious metals through bullion bars or coins, it is important that you keep in mind how important it is to diversify your portfolio to protect against any type of risk.
The Bottom Line
As you can see, there are numerous advantages to investing in physical gold. Even if you don’t consider yourself a bullion collector, it is always wise to have this type of investing in your financial portfolio. Gold is an investment that will never go out of style and you can purchase beautiful coins at any time throughout the year. Many investors buy gold bars for this reason. If you have never explored these types of bars, you should begin to look into the investment today!