Buy Gold: The Amateur Investor’s Guide to Gold

Making the choice to invest in gold is a big step (Should you invest in gold?). After all, most experts recommend a more diversified commodities fund instead of just gold.  But where do you go from here? What do you need to know in order to make your gold investment a profitable one?

The different gold options

You will undoubtedly come to find that there are plenty of ways to invest in gold. They each have different advantages and disadvantages that need to be considered when making your ultimate choice. Some people like coins, while other people would rather invest in gold stocks. ETFs are a popular choice for a few others. Here is a run-down on some of the strengths and advantages of investing in various gold types.

• Gold coins – Investing in gold coins is nice because of just how easy it is to your hands on these coins and how easy it is to sell them. Investors like these because of the security that goes along with physical holding of your investment.

• Gold bars – Similar to gold coins, these are good investments because they provide you with something tangible. One issue with bars is that they are harder to store (you’ll need a safe) and they are more difficult to sell when the time comes.

• Gold stocks – You can invest in either a blue chip gold mining stock or an exploratory company. A blue chip stock provides stability, but less chance of growth. Exploratory mining stocks have some risk, but could provide large scale rewards, as well.

• Gold ETFs – These are gold-based funds, which allow you to combine many gold stocks for more protection. The idea here is to limit your risk with a gold , while taking advantage of short-term growth of the gold price.  GLD is the most popular gold ETF.

Why Gold And When To Buy?

You could buy gold as a means of protecting yourself against economic failure in the US. As confidence in the American economy dwindles, the price of gold will likely rise (maybe).

When to buy gold is a more complicated question, as you will need to spot low price points. One principle to follow is that if you believe the economy is headed for more hard times, then now is the time to buy. If you see a recovery coming in the near future, then you might want to hold off.