One common way of investing in gold is via the purchase of gold based equities like gold mining companies and gold funds. While this is possibly the hassle free way of doing it, some people believe that these funds are not “backed” by real gold. For example, with gold mining companies, you’re often paying for the belief that the company will find and mine gold successfully in the future. You need to do a lot of analysis to figure out if your money is actually backed by any actual gold.
Investing in gold – buy actual gold
So, the other option is to buy actual gold or do a 401k to gold IRA rollover. This can be done in a variety of ways – but you must be careful to know the value of the gold you are buying, and that it is what the seller claims!
Here are a couple of other ways of buying physical gold that many people may not have thought about:
Buying gold bars – you can walk into a reputable shop and come away with gold bars. Some companies will also store your gold securely, for a fee. The problem with buying physical gold is:
- the risk of storing it (if you are keeping it at home, you risk your gold being stolen); and
- the gold cannot earn any “interest”. The only appreciation is from the value of the gold commodity itself rising in price. When you hold securities , for example stocks, some companies may pay out a dividend which can be a useful source of income.
Buying gold jewelry – investing in gold can also be achieved by purchasing gold jewelry. However, the jewelry needs to be pure, and must be in very good condition to retain its value.
Buying gold bullion coins – the other obvious way of investing in gold is by purchasing gold bullion coins. Do remember, however, gold bullion and rare gold coins are NOT the same. Some unscrupulous dealers may try to trick you into believing that rare gold coins are a good investment due to the appreciation in gold – in fact, rare gold coins are often NOT good gold investments, you should only buy minted bullion for this purpose. Rare gold coins may be an acceptable investment in its own right, but not for the purpose of gold investment is the point to keep in mind.