The Cost of Investing in Gold: Pros and Cons of This Popular Metal

Tuesday, October 22, 2019, 6:00 AM | Leave Comment

When it comes to investing your hard-earned money, it is always a good idea to diversify.

In addition to traditional stocks and bonds, you might also want to take a look at some of the pros and cons of investing in gold.

The Cost of Investing in Gold: Pros and Cons of This Popular Metal

  • Cost

    One of the best aspects of buying gold is the fact that you don’t have to spend that much money to start off. The price of gold is constantly changing, but the average investor should be able to pick up at least a few grams even if they have a smaller budget. For larger investments, you can invest in packs of coins or even a bullion bar. Many people start with pure gold jewelry before upgrading to certified coins. However, collecting coins in sets can increase the value of the gold due to its collectability, as long as it is stored safely and handled correctly.

  • Storage

    Investing in precious metal could make you quite a bit of money in the coming years, but storing gold is always going to be problematic. Keeping your gold at home will give you full control over the investment, but you will need to have excellent security. You also have the option of storing your gold in a bank or a third-party security firm. While those storage facilities will require a fee, they are usually backed by excellent insurance.

    However, buying your own physical gold isn’t the only way to invest in gold. You can also invest by buying stocks from gold mining companies, exchange-traded funds, or buy gold mutual funds where the gold is purchased and stored on your behalf. This can eliminate a lot of the gold storing struggles that prevent many people from investing in gold, especially long term. If you decide to go this route, it would be best to work with a financial advisor to ensure that your stocks are being well invested.

  • Stability

    Throughout history, gold has continued to be a relatively stable investment because of its utility and appearance. Many experts also claim that it is a great investment if you want to protect your wealth during drastic market shifts. As long as you have physical access to the gold, you will always have a valuable material that can be used to barter and trade, making it ideal for survival preppers as well. It can also be easily liquefied if you are ever in need of quick cash. While it isn’t likely to work well as a get-rich-quick investment like some sites claim, the price of gold has proven to be stable enough to maintain value over long periods, protecting your money from currency inflation.

  • Return on Investment (ROI)

    Unfortunately, there is no way to guarantee that any of your investments will make money. That being said, the market trends have shown us that gold rarely drops in value for long periods of time. As long as you keep the gold for multiple years, it will most likely increase in value. For a quick profit, you will most likely want to choose another type of investment such as buying stock in a volatile market. Investments in gold are best saved for long-term needs, such as building a nest egg for retirement. Because it is generally low-risk, the gains are moderate and not likely to come with a large profit margin.

Investing in gold can be very lucrative, but you must make sure that you carefully research the market. Even though gold tends to be a safe investment, you need to buy at the right time if you want to maximize your profits.

Author BIO

Meghan Belnap is a freelance writer who enjoys spending time with her family. She also enjoys being in the outdoors and exploring new opportunities whenever they arise. Meghan also enjoys researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure. You can connect with her on Facebook and Twitter.

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