It’s hard to believe that something that’s been around since the beginning of civilisation has stayed relevant and outlived modern currencies, even other metals. Yet here it is, as shiny, glittery and desirable as ever.
Gold continues to be a symbol of wealth and opulence so it’s not surprising that it’s a solid investment, especially when it has proven to provide a good hedge against catastrophe. When money value fails, or you need to prove your worth in another country, gold can be trusted to hold its value. Because gold’s worth isn’t pinned on monetary or share market value, it also makes it a good investment to diversify your portfolio, holding strong during periods of inflation.
There are a number of different ways to invest in gold, even if it’s not physical gold, which can be expensive, you can look to purchase shares or stocks in companies that handle gold, becoming an indirect gold buyer.
New technologies also bring gold into play utilising mobile financial technology (fintech) giving you the option to invest in gold anywhere in the world with safe storage provided. This can save a lot of time and money in the required transport, evaluation, security and insurance required to buy and house gold yourself.
If you like the thought of having your gold closer, you can have it delivered to your personal safe or secure bank deposit box.
It helps to understand the different ways to invest so the form of gold you buy meets your goals. Using fintech allows you to get started even as a beginner and start with low investments while you build your confidence and the rest of your portfolio.
Compared to a bank where your money will just sit untouched with negligible interest, gold will help you grow your money in significant ways.
What kinds of gold can you invest in?
Gold investors have two main options to invest in: Physical bullion and securities that represent gold. There are pros and cons that come with each and both work in different ways to build your wealth.
When it comes to gold, you can choose to invest in:
- Physical bullion – This is a direct way to own gold and is more resilient to natural calamities. You can also own gold in smaller commodities, however, these need to be proven as genuine before purchase including;
- Securities that represent gold – Stocks, funds and futures aren’t as pure as physical bullion gold but are more convenient for investments and can be purchased through a brokerage. Types of securities include;
- ETFs and mutual funds
- Mining stocks
Gold is and always has been a “safe haven” investment because it’s not easily affected by market forces or dramatic economic changes. If other investments are hit hard by sudden dips, gold stays relatively stable. This is why investing in gold is still a good idea, even today.
Even in the face of major events like the pandemic, gold has stayed relatively stable, making it a worthwhile long-term investment for the uncertain times ahead. Because gold does not aggressively fluctuate in value, is inflation-proof and exempt from annual tax fees, you’re able to increase your wealth over time and let it look after itself.
3 ways to maximise your gold investments
Gold investments are a fantastic and lucrative way to build your income and diversify your portfolio, however, you can’t just jump in without weighing up your options. As with all investments, you need to make sure you understand your commitment and make choices that will maximise your investments.
Here are three ways you can make your gold-related ventures worth your while.
1. Buy physical, keep it liquid
Physical gold is much easier to store and sell if you’re keeping it in your own safety deposit box, vault or home safe–so long as it’s kept completely secure. Gold can be difficult to handle, especially because you want to keep it free from damage, scratches and dents, so locking it in a vault away from harm is your best option.
Spot prices for gold can be expensive but frontloading costs and keeping the physical, allocated gold with you (or in a trusted vault) is reasonable and even recommended in the long run in some cases.
Short-term gold investments and value can be volatile. In all, gold is a better fit for long-term hedge benefits so you can maximise your returns and have something to fall back on if the worst were to happen. The longer you keep your gold, the more you’ll come to see that its inherent and perceived value continues to make it a reliable investment option.
2. Increase your investment depending on your comfort
Gold is a necessary option for your investment portfolio because it’s one of the best-performing assets in the face of inflation and manages to retain its value year on year. Given the uncertain circumstances the world has faced and the impending threat of inflation, the value of inflation-proof assets is increasing exponentially.
Analysts recommend that 1-5% of your portfolio be in gold investments so you have enough diversity to minimise volatility. With more variety in your investment portfolio, you minimise the risk of losing all your money and gains in one harsh hit. Even when other investments stall or fall, you can still bank on your other market endeavours holding strong while the market recovers.
While not a high-risk, high-reward investment, gold continues to be a lucrative option for investors looking to grow their wealth securely.
3. Conserve your wealth
Gold has comparatively stable volatility relative to securities, making it a great long-term investment and a way to conserve your wealth across generations. This doesn’t mean you can be complacent–you still need an informed investment strategy that will act as a guide or blueprint for your goals and expectations. This way you can be equipped with what you need to meet your goals and make decisions on any investment choices quickly.
Bracing yourself for future inflation rates, whether due to geopolitical conflicts or pandemic after-effects, is a strategic reason for maintaining gold investments.
Because of the reliance on supply, demand and market value, external factors can suddenly and significantly affect stock markets and economies. Any interruptions, supply chain disruptions or even untimely events like natural disasters can set the market into a downward spin. Because the wealth of gold is independent of these values it remains reliable, despite other uncertainties.
Gold has always been seen as opulent, made more attractive by its scarcity, therefore it’s something everyone finds desirable. The value that it has inherently, combined with how people still perceive it as vastly unattainable, makes it a worthwhile investment option that will not only grow your wealth but also diversify your portfolio, giving you a fallback if you ever need it.
Nauggets are experts when it comes to providing you with options around how you can successfully invest in gold and make the most out of your investment with fintech, the most convenient and easy way to buy and sell gold.
If you are ready to learn more about what you can do, where to invest and how you can “bag the gold” even with a small starting investment, get in touch with us today.