Advice varies about retirement income, with some suggesting that you need at least $1 million in savings and others suggesting you aim for a percentage of pre-retirement income. Yet, all of these suggestions assume some level of investing on your part. In most cases, it means a 401k or Roth IRA.
Unfortunately, traditional retirement accounts often lose value during inflation because of lower returns on stock investments. Some investors use gold or other precious metals to hedge against that problem, as precious metals typically gain value during inflation.
That may leave you asking, “How do you invest in gold?” Read on for a quick overview of how to invest in gold for beginners.
For the absolute beginner, the best way to invest in gold is often bullion. That means you purchase actual, physical gold. Gold bullion comes in many shapes and sizes, but most people get gold coins or buy an ounce of gold in bar form.
You can buy gold in these forms from local dealers if one operates near you. You can also invest in gold online by ordering through websites that sell gold coins or bars directly to consumers.
There is a certain mystique to owning gold, but it can come with some challenges. You’ll need a safe place to store the gold. Some people get a safe, while others put their gold in a safety deposit box.
You should also consider insuring your gold if you plan on keeping it in your home.
If you feel more comfortable dealing with your investments at a distance, you can also look at mutual funds or exchange-traded funds that specialize in gold.
With these, you aren’t buying gold specifically but rather investing in the gold market. These funds typically mimic the value of a commodity that you actually own. That provides you with a similar hedging effect to buying physical gold.
Investors who want a more hands-on approach to their gold investments may look at specific mining companies. It’s a riskier approach than bullion or gold funds.
While the value of gold may rise overall, it doesn’t always follow that a specific mining company will prosper. If there is a company that you feel strongly about, however, you can invest in them directly.
For example, maybe a mining company employs very good environmental practices. Investing in the company lets you support those practices and get into the gold market.
How Do You Invest in Gold? With a Plan
The question of how do you invest in gold has several potential answers. For the beginner or someone who likes dealing with physical investments, bullion is often the best and easiest starting place.
For more experienced investors, options like mutual funds and ETFs open up some different possibilities. You can invest in gold but take a pass on things like securing and insuring your gold. You can even invest in specific mining companies.
Looking for more investing info or tips? Check out the posts in our Finance section.