Of all the precious metals available, gold is by far the most popular as a safe investment. Investors usually purchase gold as part of a diversified portfolio as a method of reducing risk, particularly through the employment of derivatives and exchange-traded derivatives.
In contrast to investing in shares, which are also traded over major exchanges, gold trades are carried out over the counter (OTC). This means that, unlike shares, there is no physical gold delivery involved. If you wish to buy or sell shares of any company, you would need to visit your local stockbroker who would then apply a specific order to the company for you. However, when you trade OTC products, you don’t have to worry about having to wait around at an office or bank for a broker to finish the paperwork for you.
Another popular option of investing in gold is through ETFs, or Exchange Traded Funds. An ETF is a security that tracks the movements of different commodities, such as gold. By investing in ETFs you can track the movements of gold much like how a stock monitor your own stocks’ performance during the trading day.
Investing in gold paper products such as bars, certificates, or coins is another popular way for individuals to invest in gold. Although investing in these types of physical gold products can be quite profitable, they also carry a certain amount of risk.
Investing in gold jewelry is another popular option for those who are interested in investing in gold. There are many options available for those who are interested in purchasing fine jewelry including gold bracelets, watches, necklaces, and earrings. However, like investing in bars and coins, investing in gold jewelry carries certain risks. Like paper gold products, investing in gold jewelry carries some risk due to fluctuations in the market.
One final way that many people decide to invest in gold is through mining stocks. When purchasing mining stocks, an individual investor will be purchasing shares of a mining company. Investing in gold also provides investors with the opportunity to become “miners”. You can become a miner by investing in shares of gold mining companies. They are also one of the best options for investors seeking out high-risk, high-reward investments.
Gold is something you should invest in for the diversification of your portfolio. It’s a great starting point for precious metals, which are an entirely different class than ‘paper assets’ such as stocks, bonds, and real estate.Read More