Introduction
Gold is often considered a safe investment option, but is it that safe? The process of getting started with investing in gold is full of potential pitfalls, and you need to do your due diligence and make sure you are not making a mistake when you commit to buying and storing gold. After all, investing your money in gold is only as safe as the place where your gold is kept!
So, how can you ensure that your gold investment process is a safe and secure one? In this guide, we are going to take a look at some basic steps you can take to make sure that your investments are safe and that you are not being scammed by an unscrupulous gold broker.
Why Do People Invest in Gold?
Gold has always been seen as a valuable item. This means that when markets are faltering, investor demand for it and its price tend to surge. This provides the important benefit of portfolio diversity, which involves holding assets that fluctuate in price independently and differently from one another.
Gold exists only in limited quantities, and discovering and extracting additional gold is time-consuming, complex, and expensive. This supply limitation supports the price by assuring that the market will not be unexpectedly overwhelmed with newly produced gold in the future.
Choose the Right Gold Product For You
There are many different forms in which you can buy gold as an investment. All of them have their own advantages and disadvantages, however, and it is important to be certain which is right for you before you buy into any of them.
Some of these are physical options, which can take a lot of space to store, so you may also need to consider paying for safe, secure storage for your gold as well as the cost of buying it in the first place.
Others are digital commodities tied to gold, which do not have the same storage issues but can be riskier. Let’s take a look at the main types of gold products in which you could invest.
Coins and gold bars
Bullion bars and coins can make an outstanding investment option. Bullion premiums, particularly for bars, are minimal and might fall even further as the size of the bar grows. Bullion and coins may also be eligible for tax breaks, albeit this varies by location.
Numismatic coins and collectibles
Because of their design or scarcity, numismatic gold coins and collector objects, such as medals, generally have added value beyond their gold content.
Investing in jewelry
In many markets, jewelry made of exceptionally pure gold qualifies as an investment. Investment jewelry is frequently sold by the gram, although premium brands might be worth more.
Managed Gold
When you purchase bullion, collectibles, or jewelry, you must prepare for secure storage. Managed gold goods are stored in secure vaults on your behalf, so you do not need to worry about sorting out secure storage separately
Gold-backed ETFs and Similar items
Exchange-traded investment options that invest in gold bullion include gold exchange-traded funds (ETFs), exchange-traded commodities (ETCs), and similar physically backed products.
Physical gold ETFs provide investors with access to gold as an asset category with the ease of a modern investment product.
Customers who invest in ETFs do not have to exchange actual gold or manage the safeguarding of their holdings; they may invest in these ETFs as easily and as efficiently as they would in listed corporations.
Read Reviews Before You Commit
If you have found a gold broker you like the look of, it is important to take things slowly and carefully rather than diving in thoughtlessly to something with so much financial risk. You need to ensure that your chosen broker is a safe, reliable place to store your money, and that means putting in the work to do your research thoroughly.
The best way to do that is to check reviews from an independent site you trust. A great starting point is a review site like Our Fiscal Security. If a site has a good Our Firscal Security review, you can probably trust them to be a safe option.
Read the reviews carefully, paying particular attention to any negatives listed, and use this as a starting point to make an informed decision on which gold broker is right for you.
Watch Out For Fees
Gold does not gain interest. The only way gold can make you a profit is if you buy low and sell high. That means that you should be very wary of companies charging large fees for storage or transactions, as these can quickly eat into the value of your gold.
Even worse, many companies that charge large fees for gold storage and brokerage are not even legitimate companies, just scams. Upfront fees are much more likely to be a scam than smaller fees over a long period of time, but you should consider how reasonable any fee is before committing to purchase.
You should, however, expect to pay a certain level of fees. This is how most gold brokers make money, and a fee-free exchange may well have hidden catches that make the deal much worse than it looks.
Make sure you read all of the fine print before you agree to any terms, and if you are at all unsure about the legitimacy of a firm, walk away immediately and find somewhere else. It is not worth the risk.
The Golden Rule
The golden rule of investing is simply that if it looks too good to be true, it almost certainly is too good to be true. If you are being offered large amounts of gold at suspiciously low prices or all sorts of bonus offers on top, you should be very wary.
There are many places where you can invest in gold, and it is much better to take your time and find a place that looks safe and sensible than to go for the first place you see and end up falling for a scam.