Gold is considered to be one of the safest investments in times of economic turbulence. Despite being a commodity that has its share of volatile price fluctuations in the short-term, its remarkable long-term returns make it a favorite among investors.
What is the best way to invest in gold? While there is no concrete answer to this question, there are a bevy of options investors can choose from.
Gold bullion and coins
Bullion and minted coins represent pure, tangible value and are the investment of choice for many. Direct ownership of gold coins in particular is desirable because of their easy storage, portability and aesthetic value, due to which many investors are willing to pay a premium for them.
Gold bars can be purchased through bullion dealers, but since doing so isn’t always easy, investors can choose gold certificate schemes that are offered by several organizations. These schemes allow for investments in bullion without worrying about the storage aspect since the bars are stocked in secure vaults. A certificate of deposit is handed over to the investor when he/she purchases the gold.
Exchange Traded Commodities (ETCs)
ETCs are inert investments that track the commodities sector. If you opt for a gold ETC, the worth of your investment in the yellow metal will be proportional to the rise and fall in gold prices. ETCs also give investors two options: to leverage their savings, or bet against a rise in gold prices.
Shares and mutual funds
Gold shares and mutual funds are a feasible option for those wary of investing in physical gold. These consist of the stock portfolios of gold mining companies. It is always advisable to invest in mutual funds or shares of well-established mining companies rather than go for cheap stocks of relatively younger firms.
The above mentioned gold investment instruments are just a few in the pick of many. Gold Accumulation Plans (GAPs), gold orientated funds, and other choices may be more to your liking. You must ideally consult your financial advisor before making any investment.