People choose to invest in gold for all sorts of reasons. Experienced investors may use it as a tool for diversification, helping to reduce the risk level attached to their portfolio. Risk-averse traders may favour it because of its traditional role as a safe haven asset. Or, in the case of entrepreneurs, it might be selected as a means of providing a stable source of income for the times when business proves tough.
Irrespective of the reasoning, role, or rightness of the decisions that drive these investments, gold is prized for one quality above all: its price stability. Largely immune to deflation, and untouched by the ravages of social, political, or economic strife, it is the asset of choice for those unwilling to risk their livelihoods or their financial futures.
However, it is not as simple as making a choice to invest. First, you must understand the various options that are available to you, and that’s why we’ve created this handy little guide.
One means of investing in gold is to consider exchange-traded funds (ETFs). These can be confusing for uninitiated or novice investors, and this means that they’re often better left to the professionals. In their most basic form, they are a type of share, yet they act more like funds. They work by tracking an index, such as the price of gold. Bought and sold via stockbrokers and investment agents, they are worth considering if you’re willing to put the time and effort into educating yourself on their function and mechanisms.
For those who would prefer an option that’s less time-consuming and labour intensive, unit trusts offer a natural choice. They tend to be well suited to those who have little time for trading, or no inclination for learning about the art of investing. Run by a professional fund manager, they place your capital in both bullion and gold mining companies in order to achieve the most profitable outcome for you.
If you’re looking for something a little different again, you might want to consider investing in physical gold. This type of investment awards traders with physical ownership of gold bullion, which is generally stored in a secure vault by your broker. It is a wonderful option for those who have little knowledge of trading and how it works, and is also an ideal choice for those who don’t have huge cash reserves to invest. It can be bought in a variety of unit sizes, meaning that you can find a package that’s perfect for you.
Bullion Coins and Bars
One final alternative to explore is the bullion coins and bars that have been specifically created for investment purposes. With coins and gold bar options purchasable from as little as £20, they can be a useful choice for those working within a limited budget.
If you’re considering investing in gold, which option would be best for you?