There are currently 9 known precious metals but only Gold, silver, platinum, and palladium are considered investment commodities. Of the 4 gold is definitely the most popular among investors and for good reason. Gold is known world wide since its really the original currency, in fact paper currency was originally simply a promise to pay the particular bearer in gold. These days purchasing gold is a popular way of protecting ones assets against recessions and even nationwide and international crises. Lets face it if the world started more than tomorrow after a major catastrophe plus there was only 1 society gold will be the common currency as it was up to the 1800s. Below is a checklist and brief description of the most popular ways to add gold investments to your portfolio.
Buying gold coins is currently the most popular way of investing in gold. Gold bullion coins are generally priced based on their particular weight HOWEVER a premium is always put into the current price of gold. Gold coins might be bought or sold over the counter in many Swiss banks, also by particular order is many other banks. You can also buy over the internet or from local coin dealers.
Buying gold bullion bars is the most traditional way of purchasing gold and as with Gold coins they may be purchased or sold over the counter in most Swiss banks, also by specific order is many other banks globally. You can also buy over the internet or from local dealers in most cases. Gold bars are becoming less popular option for investors because of difficulties such as the verification process, transportation, and storage associated with owning gold bars. They still are usually my personal favorite and tend to have less of a premium then gold coins.
With a precious metal account, gold can be bought or sold in a very similar way that foreign currencies are traded. A gold account can be backed either through NON fungible (allocated) gold storage or pooled (unallocated) storage. You may even able to get leverage when buying gold however this can be risky but like anything else gold does go up and down, if you take to a lot leverage you may end up having to pay more income on a margin call or danger having your gold sold at a loss to you. If you use leverage you should treat the entire amount as the investment not only what you put up just in case gold happens to go through a corrective stage plus temporarily dips.
Another popular option among investors is to invest in a gold certificate rather than buy physical precious metal bullion which then has to be stored and insured to protect against theft as well as other such incidents. A gold certificate allows the investor to buy promote the commodity and eliminate the difficulties associated with owning actual gold. Drawback is that you never really have the access to the particular physical gold.
Gold exchange exchanged funds (knows and referred to as GETFs) are open ended funds that will present a cost efficient and protected way to invest in gold without the requirement of taking physical delivery of gold bullion. Trading GETFs is comparable to trading shares in any of the sides stock exchanges such as the Dow Jones Industrial in New York. Trading in GETFs involves payment of percentage and storage fees which are billed on an annual basis. The expenditures incurred in relation to the handling of the fund are charged through the offering of a certain amount of the gold since represented by the certificate. Over time, the amount of gold in the certificate decreases to pay these costs with the hope of course the price of gold itself has increased therefore producing the certificate worth more then your original investment.
Some larger financial service firms can provide what is known as Contract for Difference (CFD). In this type of gold investment, two parties (a “buyer” and a “seller”) enter into an agreement, in which the seller agrees to pay the customer the difference between the current value of precious metal and its value at contract time. In case the difference is negative, the seller receives payment instead from the purchaser. A CFD, therefore , allows an investor to take advantage of long or short positions, allowing the investor to speculate in the marketplace.
Remember to Go into EVERY investment along with your eyes open, you should HONESTLY method the pros and cons of all investments you make based on your personal circumstances and willingness to commit weather your investment be buying gold or starting a brick and mortar business.