Perhaps you have heard the buzz in recent years about investing in gold and the price of gold, which reached an historic high in 2011. Why so much interest in gold? Gold is traditionally considered a safe hedge against inflation. It is also a way to diversify your investment portfolio. Finally, gold can be a sound investment in times of international stability as we saw in 2011. For these reasons and more, many people have a renewed interest in gold. Many companies like U.S. Money Reserve Inc are in the business of offering gold investments because they know how good of an investment gold is, and are offering many people the chance to make money.
If you are considering investing in gold, here are some basics you may need to know:
There are two main types of gold investments—bullion and gold stock.
If you invest in gold bullion, you are investing in physical gold. You will buy gold coins or bars. As the market shifts, you may notice that the price of the gold you have may decrease or increase. (You can get daily updates on the price of gold through a site like Lear Capital.) During times of economic turmoil, the price of gold can increase. During economic growth, the price of gold tends to recede. However, while the price of gold may fluctuate in the short term, overall, historically, it increases in value.
If you choose to invest in gold bullion, you will need to think carefully about where you will store it. You may physically have the gold, and while you may want to have it stored somewhere near to you, you probably don’t want to store it in your home, especially if you own quite a bit of physical gold.
If you invest in gold stock, you generally are investing in the mines that produce the gold. This is often considered safer than investing in gold bullion, and it is also used to grow wealth (while investing in gold coins and bars is more often a measure taken to hedge against inflation). While investing in gold stock may be safer, you still have to carefully analyze the companies you invest in.
You may see a rise in gold stock during the fall, which is the wedding season in India. There, gold is used as part of the culture, and the need for gold increases in the fall both for weddings and festivals.
Another advantage of investing in gold stock is that you will not have to find a place to store it, and hold the stock will not make you a target for burglars as holding gold coins and bars in your home may make you.
There are several good reasons to invest in gold, not the least of which is that it can help diversify your portfolio. Once you have made the decision to invest in gold, you will need to decide which form you will choose and how you will store it, if you are investing in gold bullion.