World economic turmoil continues to be the lead story on the news each day and this has more people looking for the best way to buy gold as a hedge against rising inflation and currency instability. Investing in gold provides people with a way to offset their fears about inflation, falling equity markets and unstable political situations. However, investing in gold requires that you understand what you are doing, have a solid plan of action and can maintain the discipline to execute your plan during times of extreme volatility.
Buying Gold Coins as a Hedge for the Future
Investing in anything causes many people to do nothing because of fear but investing in gold raises more fears than any other type of investment. When you understand the investment there is less fear and since everyone understands coins, this makes gold coins a much easier investment for people to consider. Investing in gold by purchasing gold coins is often the first step that many investors take because of how easy the concept is to grasp. Many governments around the world have produced gold coins and many of the coins are still in circulation. The American Gold Eagle, the Canadian Maple Leaf and the South African Kruggerand are perhaps the three most commonly known gold coins in the world.
Government minted gold coins are usually produced in a variety of weights that are representative of some portion of a troy ounce, rarely are coins produced that weigh more than a single troy ounce. Bullion coins are sold at a premium from dealers and this premium along with the current gold price, demand for the coin and the weight of the coin all combine to determine the price an investor will pay. When purchasing gold coins the premium often makes them a poor investment unless you intend to hold them for a long period of time.
Equity Investments as a Way of Investing in Gold
Gold stocks, ETFs, mutual funds and futures offer investors another way to buy gold in these unstable economic times. However, these types of investment may not be the best way to buy gold because of the uncertainty that comes with owning a paper investment in a hard money investment. All of the equity investments carry significant risk and should only be undertaken if you understand how the investment works and the underlying risks involved with these types of investments.
Finding the Best Way to Buy Gold
Investing in gold is best done in one of three different ways. Large cap Gold Stocks that pay dividends, mutual funds that are diversified across the gold spectrum and gold coins that are minted by a government. Employing one of these types of gold investments is the best way to diversify your investment and also to protect yourself from the inherent volatility of investing in gold.
Equity shares that are based on companies with a large capitalization base provide a safe investment that pays dividends and provides a regular income from the gold market. Another way of introducing regular income from gold coins comes from using gold mutual funds that are openly traded on the major exchanges. While producing income is the goal of many investors, investing in gold is usually done not for income but for long term growth and protection against financial crises. The best way to buy gold for the majority of investors remains gold coins, since investing in gold this way allows you to hold and store the commodity yourself and this option provides real security should your local economy ever get really ugly.
Source: http://www.nahrg.org/2012/03/22/investing-in-gold-to-secure-your-future/
drew barrymore bill o brien portland trailblazers will kopelman casey anthony leann rimes dakota fanning
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.