Gold is considered a safe investment. Those who invest the precious metal in small shares in their personal portfolio benefit from rising prices and avoid the risk of fluctuations in value.
Hardly any investment is as attractive to private investors as gold. For centuries, the shiny precious metal has stood for prosperity and wealth. Already in the Middle Ages it was used as a medium of exchange, but today nobody has to exchange gold for goods. As a store of value, however, the raw material has lost none of its charm. Even during the financial and banking crisis in 2008 and 2009, private investors in particular rediscovered the precious metal as an investment.
The demand for gold has been unbroken since then but also influences the price. When investing in gold, you must realize that gold bars, coins and even securities such as gold funds or gold ira companies compared are gaining and losing value. Nevertheless, experienced investment advisers regularly recommend adding gold to their private portfolio. So what do you need to know as a private investor before investing in the sought after commodity?
The right time is now
The current gold price fluctuates as well as stocks, funds or other securities. It is influenced, among other things, by supply and demand, by interest rates in the markets and by the overall political and economic situation. Because of these multiple factors, even experts do not dare to predict how the price will develop over the coming months.
Even a high price can continue to rise and a low gold price can go even deeper into the basement. So if you want to bring gold into your portfolio, do not rely on forecasts from professionals. You can always invest in precious metals relatively independently of the movements in the markets. The condition is that they do not speculate on rapid price gains, but aim for a reasonable increase in value. There is no need to wait for a specific political or economic development.
This is how you optimally spread your risk
Financial professionals suggest that the personal asset building portfolio should be built on multiple pillars. These include, for example, a property for own use, a leased property as an investment and a fund investment. If you want to make provision for retirement, you may want to take out several life and pension insurance policies. On the other hand, day and time deposits are more suitable for a short- to medium-term flexible investment.
In any case, you should not put everything on one card and bring all your money into a single investment. If it loses very much in value, your entire fortune is lost. On the other hand, if you divide the invested funds between several pillars, the risk of losses is significantly lower. In the past, even the major financial and economic crises rarely led to widespread depreciation of real estate, equities, commodities, funds and other securities. Experts suggest investing about ten percent of the total assets in precious metals. So, if you spend $ 500 a month on your personal retirement savings or financial reserves, you should invest around $ 50 in gold. Highly recommended is also an addition of silver in your portfolio.
The raw material is unjustly referred to as the “little man’s gold”. The silver price is subject to similar fluctuations as the gold price, but is considerably lower. Even with a small investment in silver, you as a buyer therefore get a greater value of precious metal. If your financial circumstances allow it, you may well invest in both commodities.
The denomination is important
The idea of a bullion in the safe makes the heart of many private investors beat faster. How much money you can invest in gold, of course, depends very much on your financial resources. If you invest smaller sums, gold coins offer themselves. Gold bars are available from a weight of 0.5 grams to buy. If you want to invest more money, buy a big bullion.
But keep in mind that you pay more for a small denomination in relation to the gold price. That is, for two 50-gram gold bars, you pay more than 100 grams for a single ingot. If you want to sell your gold at some point, small quantities are better suited. A gold coin is easier to sell on the market than a one-pound gold bullion. For private investors a regular investment in smaller amounts is a good alternative. For example, if you invest a small sum in precious metals every month, you can easily sell the gold you buy if you need it.
You can also keep it for a longer period of time. Incidentally, when purchasing physical gold, be sure to choose a recognized manufacturer. An established seller should have an LBMA certificate or a similar quality seal. The higher the gold content of the bill or coin, the easier it will be to sell your gold later.
With a fine weight of 999/1000 you do not go wrong as an investor. Due to the high gold content, these bars are always in demand on the market. The situation is similar with the classic bullion coins such as the South African Krugerrand, the Canadian Maple Leaf or the Austrian Philharmonic. These coins are available in several sizes at different prices.
Before the purchase is the price comparison
You can buy gold coins and bars from your bank or a gold dealer. Before you buy, inform yourself in detail about the prices and the conditions. It is best to use the internet to compare offers. Some traders immediately pass on price changes to the customer. Other sellers follow a fixed price of precious metals for a long time, even if it fluctuates slightly.