Everything is volatile. Investing in only one market, be it stocks, real estate, cryptocurrency, or precious metals, comes with its good times and bad times.
The risky thing to do is invest everything in the same place. A better approach is to diversify, balancing your investment and wealth across different markets.
When one goes down, the others may or may not be as affected. It’s a safer way to manage your portfolio.
Interested in investing in physical gold? It’s a time-tested place to put your money. And it’s not going out of style any time soon.
Gold and other precious metals have a stable track record of growth and value. While they may not provide the mind-boggling, overnight returns that some types of investments claim, they are consistent over time.
So why invest in physical gold? And what is the best way to invest in physical gold? That’s precisely what we cover below, so keep reading.
Why Is Gold Valuable?
Gold has been valued by people and societies for many generations. It has been a common source of money for thousands of years.
There’s enough of it on the planet to create coins and assets out of it. Yet it’s still rare enough that it fetches a high-price, as not everyone can get their hands on it.
Gold is real, tangible, and physical. When you invest in gold, there is a physical substance behind it. You can’t say that about stocks. You can’t even say that about the dollar bills in your wallet.
The paper in and of itself doesn’t hold value. Gold does hold tangible value.
Benefits of Investing in Physical Gold
So what are the risks and rewards of investing in physical gold bullion?
For starters, gold protects against inflation. Simply saving your money in the bank causes you to lose money over time due to inflation each year. In years of high inflation, stock values often drop while gold value increases.
It also has a limited supply. While many companies are mining gold every year, it’s not overly abundant and the supply is limited. But the demand is high and increasing, causing gold to steadily increase in price.
Plus, it will balance your portfolio. The performance of gold investments is not related to the stock market. In years where your stocks plummet, you may find your gold rising.
How to Invest in Physical Gold
The best way to invest in physical gold is to buy pure gold, which is 99.5% gold. Alloys are mixed metals, combining gold with cheap metals.
It’s best to stick with buying gold bars in smaller sizes. Smaller sizes allow you to sell your gold more easily when needed, versus a large, expensive bar.
And yes, you’ll pay a premium on the gold your invest in, or buy. Check out the definition of premium to better understand this investment strategy. Make sure to only invest with reputable marketplaces.
Start Investing in Physical Gold Today
There are many benefits of investing in physical gold, and many different ways you can do it. What’s most important is that you completely understand gold as an investment vehicle before purchasing any.
The best investments are those you understand. Once you understand the pros and cons and decide on your strategy, gold is a great way to balance your portfolio and hedge against inflation.
Looking for more investing and financial tips? Be sure to check out more on our blog today.