If you are unfamiliar, gold has been an investment item for centuries. It is still a popular investment choice today because it is a tangible asset that can be stored in your home or office, and because it is generally considered to be a safe haven when the economy is in turmoil. If that sounds relevant to our situation right now, you would be correct.
As far as what it is, it is not overly complicated. You see, gold investing is the process of buying gold, either as bullion bars or coins, in order to increase the value of your portfolio. This article will explore what you need to know about gold investing before you start and how to get started.
There are two main types of investments that people use: stocks and bonds. Gold can also be classified as an investment, but it’s not like stocks or bonds – which are typically traded on exchanges or other public markets. When you buy gold as an investment, you’re buying physical bars (at least, in most cases).
Understanding the Difference: Gold vs. Cryptocurrency
I am starting here today because I think there is a common misconception or misunderstanding that these types of assets are related. Trust me when I say they are really not – it is just that they are both popular alternatives to stocks and bonds right now given our economic climate.
When it comes to cryptocurrencies, the lines can be blurred a lot because there are so many different types. Generally speaking, though, cryptocurrencies are a type of digital currency that use cryptography to secure and verify transactions. Cryptocurrency is not backed by any country and has no physical form, so it is an entirely digital asset.
This, of course, makes it inherently risky. That is especially true because they are not officially backed by any country in terms of exchange rate. In most cases, you can only use them online.
Meanwhile, gold is a precious metal and valuable commodity with a limited supply. It has been used as a form of currency and store of value for centuries because it does not corrode or tarnish like other metals, it is scarce, durable, divisible, and portable. On top of that, it is relatively easy to verify the authenticity of gold.
If you want to learn more about all of that, you can look at resources such as this one: https://study.com/learn/lesson/what-is-gold-properties-uses.html. In general, precious metals tend to be considered a more stable form of investment than something like cryptocurrency, so bear that in mind if you were debating between the two.
Why Should We Purchase Physical Gold and/or Bullion?
Now, this is a bit more of a nuanced topic, as there are both positives and negatives to consider in terms of owning physical, also known as tangible, assets. Storing them can be a difficulty, but usually the good outweighs the bad.
That is because gold is a valuable store of wealth, and it has been for a very long time. If you did not know, gold coins are the most popular form of owning gold bullion. That being said, not all of them are allowable in retirement accounts like IRAs, so just try to remember that if you are looking to invest via gold coins. Try to get ones such as the American Golden Eagle or the Canadian Maple Leaf.
As I am sure you can imagine, there are several reasons why people decide to own physical gold coins and bars. For one thing, physical gold coins and bullion offer protection from inflation because they will always be worth something, regardless of how much money you have in your bank account. In fact, I would say that is the biggest reason that people are getting into precious metals right now.
Of course, like I touched upon, physical gold is a tangible asset that you can hold in your hand. This can offer you some peace of mind when markets crash or if there is a global financial crisis. We seem to be on the cusp of that – I know that a lot of others who also lived through the 2008 crisis like me are worried right now.
The final point I will discuss here is that physical gold offers diversification in your investment portfolio, which can help to protect you against market downturns or economic downturns. You can learn more about this if you look at reviews of some brokers, like a Goldline International review, as they can offer some more perspectives on how all of this works. Just note that there is often a fee for storing your precious metals with a custodian, so that is the main downside.
Should We Invest Sooner Rather than Later?
This is the big question, right? Personally, I hate feeling pressured into buying things immediately. That being said, with everything going on the world right now, I think it is unfortunately something that we need to consider.
If we look at current economic trends, I will say that now is probably one of the better times to start investing if you have been on the fence for a while. It seems like we have very little guaranteed financial security for our futures, particularly in the United States. Who knows how long Social Security will last, right? A lot of millennials like me worry it will not last for us.
So, we are looking for ways to feel more secure as we approach retirement age. One method is investing, and in that vein, making sure that we diversify our assets as much as we can. Commodities are a route that many take because of the variety of difference options inherent to this class of asset.
There are precious metals, raw goods like crops or livestock, and even some forms of energy classify. They tend to be a nice place to start for beginners, too, as they are not all overly expensive when we are dipping our toes into investing.