The Best Ways to Invest in Gold

by Investing School on January 20, 2010

When it comes to investing in gold, the best way to make it happen is to spend some capital on many different gold products. One of the biggest mistakes that investors make when investing in gold is that they put too much faith in one product.

Gold is nice because you can invest in things like coins, bullion, and bars, but you can also buy gold certificates and gold-related funds, too. If you want to be as diversified as possible, you will combine all of these things, while also investing in some of the gold stock that are out there on the market today. Each has its advantages that you can exploit.

Picking the best blue chip gold stocks

Talk to savvy investors and it will become clear and apparent the best way to get your money into the gold market. These people buy coins and bars, but they go a little bit further than that. Buying blue chip gold stocks is a solid option because these companies have consistently posted nice returns over the last decade. Blue chip gold stocks are in a better position right now than they have been in the past for one reason. With their economic superiority, they are able to buy out the small exploratory companies and completely dominate the marketplace. This stranglehold on the market gives them power and bargaining ability.

Using exploratory gold company stock as a growth option

Few items in the gold investment world offer a competitive chance at growing your money. There is one exception, though. Exploratory companies sell stock to the public and they go out to find gold all the time. If you put in the time to research and find good up and coming companies, you can reap the rewards when they do well. Most of these companies will eventually be bought out by the big gold mining firms, so the stock will explode in value when that happens. This is a riskier strategy, but it is something worth considering as a small part of your overall gold buying plan.

Buying gold coins

Probably the most common and popular way to invest in gold is through the purchase of gold coins. These are available through a host of different sellers, with some of them being on the internet and some of them being out in the “real” world. Buying coins is a good way to go about gold investment because it provides you with something that is highly liquid and highly portable. Gold coins have the same value as things like bars, but you can keep them in a little sack or you can store them in a safe without taking up too much room. For those who are worried about the safety of their gold, this is a nice choice.

With coins, it is easy to buy and sell them when you see an opportunity. Most folks who want something tangible to add to their investment portfolio will purchase a certain dollar amount of these, since gold coins are pretty valuable all around the world. You are definitely not limited in when and where you can sell gold coins, which adds a lot to their practical value.

Buying gold bars

A slightly less common way to buy gold is by purchasing bars. You can buy pure gold bars known as bullion, as well. The downside to purchasing bars is that it requires a lot of space to store them. With each gold bar having a lot of value, it is important that you keep these items locked up and in a safe place. Just leaving them around is a good way to have a lot of your gold portfolio stolen out from under you.

Bars and gold coins can usually be purchased from similar sellers and the benefits are basically the same. As tangible gold assets, they are a nice security blanket, because their value is not going to plummet. Even if the markets go bust, these items will retain their value all over the world.

The smart investors will choose a few of these investment avenues and break things up. Gold itself is a nice tool for diversification, but it is even better if you can diversify within your gold investment itself. Go for tangible assets to feel comfortable with your value and choose some of the more high-yield stocks to give yourself a chance to grow. This method has proven to work for many people and it’s something that is highly recommended.

About the Author: Shaun Connell writes and updates his gold coins blog, where you can learn more about the best ways to invest in gold.

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