It is known that gold has been a precious metal since ancient times and has always represented a popular investment, since it is a tangible asset that retains its value even when money loses it and is interchangeable and accepted all over the world. This article will give you some tips on investing your money for the purpose of purchasing gold. Of course, take into account the amount you want to invest, your goals, the risks you can take and how long you want to keep it.
Steps
Method 1 of 5: Buying Scraps of Gold
Step 1. This mode has become a popular investment strategy
With the price of gold steadily rising, buying scrap is a low-risk way to invest in this valuable asset.
- Duration of investment: varies.
- Nature of the investment: low risk. Gold is the safest investment option available and the benefits are worth less risk.
- Investor Profile: This strategy is ideal for first-time investors or those who want to have something aside for tough times.
Step 2. Ask your family and friends if they have any gold to sell
Virtually everyone has broken necklaces, damaged rings, mismatched earrings, and other unusable gold items. Agree on the price.
Step 3. Post an ad in the local newspaper:
you will soon find people willing to sell their gold for cash.
Step 4. Also post an ad online to increase your chances
Step 5. Monitor internet auctions
Gold items are often sold for less than their value, so buying them this way is a great investment tool. Be sure to calculate any taxes and shipping costs before bidding.
Step 6. Get in touch with local pawn shops
Leave them your details, asking to be called when someone sells gold pieces they don't want. Smaller stores often have plans to resell them.
Method 2 of 5: Buy Gold Pieces
Step 1. Buy gold pieces, such as bars
In a financially unstable world, you will have some guarantee by making such a purchase.
- Duration of investment: long-term. Even when the economy picks up, inflation will be hot on its heels. And which asset resists inflation? They.
- Nature of the investment: low risk. Experts agree that the investment pyramid is built on gold pieces.
- Investor Profile: This investment is perfect for a new investor.
Step 2. Decide what kind of gold mass you want to buy:
you can choose between coins, bars and jewels.
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Gold coins: ancient ones (minted before 1933) tend to have a higher value, consisting of both the price of gold and the numismatic factor.
- The historical gold coins that are not sold with an excessive premium because they contain only 90% gold are the following: the English sovereign currency, the British guinea, the Spanish escudo, the 20 and 40 French francs, the 20 Swiss francs, the American Gold Eagle ($ 10), the Half Eagle ($ 5) and the Double Eagle ($ 20).
- The English sovereign coins and the American Gold Eagle are notable exceptions with their gold content of 91.66%, or 22 karat. Other gold coins include the Canadian maple leaf, the Australian kangaroo, the South African Krugerrand (which caused a sensation throughout the gold coin investment market) and the 24-karat Vienna Philharmonic.
- Gold bars, the purity of which is usually 99.5-99.9%. Among the most famous refineries, PAMP, Credit Suisse, Johnson Matthey and Metalor. You will see these names printed on the bars.
- Gold jewelry. The problem with this investment is paying more for the goldsmith's work and for the design. Pieces of 14 karat or less are not worth the investment, and if you want to resell them, you will need to refine the gold. On the other hand, it is possible to buy antique or vintage jewelry at affordable prices at auctions. The oldest pieces are characterized by the added value determined by the craftsmanship.
Step 3. Decide the weight of the pieces you will buy
Clearly, the heavier the weight, the higher the price. Also, don't forget that you will need to keep them in a safe place.
- The American Eagle Gold and the other coins in the previous list have four weights: 0.03 kg, 0.014 kg, 0.007 kg and 0.003 kg approximately.
- The different weights of the bars are these: 0.03 kg, 0.28 kg and 2.83 kg.
Step 4. Find a place to buy the gold items
This can be a self-employed seller, a brokerage agency or a bank. Find out about the bidder's reputation and experience and ask them to show you a certificate.
- There is also a market on the web.
- If you opt for a jewelry store, choose a reliable shop that has been open for many years.
- The auctions are also full of pieces of excellent quality, but you will almost always have to do a research on the actual value of what you have purchased.
Step 5. Determine the current market price for gold and verify it with more than one source
Step 6. Aim to buy gold coins or bars at the market price (or for less), plus an extra of approximately 1%
Most sellers have a minimum purchase threshold, charge for shipping and handling of the purchase, and offer discounts based on the quantity purchased.
- Keep the receipts of all purchases and ask for confirmation of the delivery date before paying.
- If you buy at an auction, remember to add any required taxes to the price.
Step 7. Store your gold in a safe place, perhaps in a bank
Part of the security of the investment is linked to this factor.
Method 3 of 5: Buying Gold Futures
Step 1. Think carefully
If you intend to take a higher risk, remember that this is not so much about investing as speculating, so in some cases, you will have to gamble.
- Duration of investment: varies. In general, investing in gold futures is like making a short-term prediction as to what the price of gold will be in the near future. However, many investors invest and invest for several years.
- Nature of the investment: high risk. Volatility is high and many inexperienced investors lose money.
- Investor profile. This strategy is best suited to experts - few novices make profits from gold futures.
Step 2. Open a futures account with a commodity trading firm
Futures allow you to have control over a greater value of gold.
Step 3. Invest capital that you can afford to lose
If the price of gold plummets, you may end up owing more money than you have invested once the fees are added.
Step 4. Buy a gold futures contract
Gold futures are legal agreements under which you will make certain profits. For example, you can buy 2.83 kg of gold for a two-year contract worth $ 46,000 for at least 3% of the value, or $ 1,380.
- Commodity trading requires the payment of a commission for each trade.
- Each trading unit on the COMEX (commodity exchange) equals 100 troy ounces.
- Electronic trading is equally valid for gold.
Step 5. Wait for the contract to come to an end
You can get your gains or pay your losses. An investor can trade a futures position for physical gold. However, most investors balance their positions before contracts mature instead of accepting or giving physical gold.
When you buy a futures contract for a fraction of the cost of the quantity of the asset in question, you are essentially betting on a small change in the price of the property. You can make a lot of money by buying gold futures if the value of the metal goes up, but if it goes down, you can lose everything you've invested and more (if your futures contracts aren't simply sold to someone else when you don't have). enough money). In short, this strategy is speculative, in itself it is not a way to save
Method 4 of 5: Buy Gold Exchange Traded Funds
Step 1. ETFs, Exchange Traded Funds, aim to follow the prices of silver and gold and are typically bought through a typical stockbroker
They are a kind of derivative contracts on price tracks, the difference is that you will not own the underlying gold assets if you invest in this way.
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There are two types of ETFs: Market Vectors Gold Miners ETF and Market Vectors Junior Gold Miners.
- Market Vectors Gold Miners ETFs seek to track (before adding fees and taxes) the return and price of the New York Exchange Arca Gold Miners Index. The portfolio contains mining companies of all sizes spread across the planet.
- Market Vectors Juniors Gold Miners ETFs debuted in 2009 and have become extremely popular with investors looking for indirect access to gold assets. While similar to Gold Miners, Junior Gold Miners ETFs focus on small businesses looking for new sources of gold. As these companies are less solid, the risk is greater.
- Duration of the investment: short term. Once a year you pay a commission which is deducted from the amount of gold underlying your investment, so this is not the most attractive way to invest in gold.
- Nature of investment: medium risk because a typical ETF investment is short term.
Step 2. Contact a broker
Rely on the same agent you would call to buy a stock or mutual fund. A gold exchange traded fund should be dependent on the price of gold and, at the same time, maintain the liquidity of a stock.
- Don't forget that gold exchange traded funds don't give you the ability to physically control gold. As a result, many believe this is a bad way to own a commodity.
- Another drawback is that ETF trading can involve paying a commission to buy and sell. In addition, all capital earned will need to be declared and taxed.
Method 5 of 5: Invest in Gold
Step 1. Decide why you want to do it so you don't make any rash choices
Understand that gold carries a certain value but that it is still an investment, which could go wrong at times. Why Invest?
- The demand for gold is always high. It is a tangible product whose future desirability is assured. It is more durable than other antique and collectible items, subject to fluctuations caused by fashion.
- Owning gold protects you from currency decline and inflation. Countries often start investing in gold when economic growth starts to fail. The more indebted an economy is, the higher the price of gold will be.
- Gold allows you to diversify your investment portfolio, and this is good according to finance experts because it ensures safer financial management.
- Gold is a means of protecting well-being for a long period of time (provided you keep it in a safe place).
- In times of civil instability, gold protects assets, is easy to carry and hide, and can make you a profit when everything else is lost.
Advice
- As the price of gold tends to be cyclical and subject to many factors including its demand and supply, it can be quite difficult to assign a value to it in a country whose currency is constantly depreciating. It is possible to give it a value based on the price of the stocks, which are easier to evaluate. Check out the Dow / Gold ratio from 1885 to 1995: https://www.sharelynx.com/chartsfixed/115yeardowgoldratio.gif. The Dow / gold ratio is the Dow Jones Industrial Average relative to the price of gold per ounce, which is how many ounces of gold the Dow can buy. A high Dow / gold ratio means that the price of stocks is too high and gold is cheap, a low Dow / gold ratio means that the price of gold is excessively high, while stocks are cheaper. A quick glance at the chart and its relentless upward slope leads to the immediate conclusion that stocks will buy more and more gold over the long term, so they are a better long term investment. However, long periods also occurred, such as between 1929 and 1942 and between 1968 and 1980, during which gold outperformed stocks. It is helpful to look at the Dow / gold ratio to prevent accidents.
- If you store your gold at home, protect it. Keep it out of sight and get a safe, but don't write the combination on a sticky note attached to the side. Its price is less than an ounce of gold and can also be used to store important documents, such as passports, contracts, etc.
- Gold can be bought Monday through Friday between 9am and 5pm Eastern Standard Time.
- The interest rate of the gold futures trading fee can be negotiated.
- Don't pay too much for gold. Remember that the historical price has always been around $ 400 per ounce (see table here: https://www.sharelynx.com/chartsfixed/600yeargold.gif), but during times of economic uncertainty it increases. When the economy improves, the price returns to the same as it was before the crisis.
- Collecting gold antiques can be profitable. In any case, it must be done legally, having adequate permits. The black market, in addition to being illegal, is immoral: most countries consider these pieces as heritage of humanity.
- Beware of scams.
Warnings
- Don't tell anyone about your investment in gold - doing so will make you vulnerable. Only tell people close to you.
- Coins have a surcharge determined by the value of the metal and the collectability value. If the value of the second factor exceeds the first, consider whether to invest in gold or a collection.
- Having gold puts you at risk, so buy a safe.
- As with any other investment, be prepared for the possibility of losing money. The value of commodities fluctuates over time and seeing the value of the investment decrease is a real possibility. You should consult a financial advisor before investing if you are not an expert.
- Never pay more than the market price indicates (a surcharge exceeding 12% is unacceptable).
- Make sure the gold is real before you buy it.
- The financial return of gold does not work like that of a stock or bond, since its profit is determined solely by the change in the price per ounce. Investing is good for your future savings, but you will still have to manage your money well, it is not a risk-free market.
