How to Find Financial Freedom by Investing in Gold

Financial freedom is something that we all seek, but getting there is often easier said than it is done. With that in mind, some people are investing a portion of their portfolio in gold to help meet this goal. How do they do it? It starts with figuring out what your long term and short term goals are.

Read The Amateur Investor’s Guide to Gold for a primer on the basics of investing in gold.

Gold as a long-term holding

The first rule of investing is “don’t lose money.” Although planning for the short-term strategy is obviously important, your long-term goals must take precedence. The nice thing about investing in physical gold – like gold coins or bars – is that you will be protected in the case of financial failure in the markets (like the recent real estate crash, for instance). Gold has a kind of global value that can’t be found in many investment types, which makes it especially valuable for the long run.

Using gold in the short term

Many people find financial freedom investing in gold at low entry points. If you can monitor the price of gold and understand that the price often dips when confidence in the US economy is high, then you can buy in at the right times. If you are sharp enough to buy in at a temporary price dip, then good money can be made by short selling gold.

Additionally, many people add a risky, but profitable option to their portfolio when they invest in exploratory gold stocks or a gold ETF. This allows them to invest in small gold companies and reap the rewards when these companies strike it big or get bought out by one of the larger gold mining corporations.

Gold as a part of the strategy

Gold is best used as a part of a larger strategy when investing. Gold has its purpose and can certainly help stabilize a volatile portfolio in certain situations, but diversification is the name of the game. I would only feel comfortable investing in gold via balanced and diversified portfolio including other asset classes like that represented by Harry Browne’s Permanent Portfolio.