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Investing in Gold Bar

By Edited Nov 13, 2013 0 0

Here are the reasons why investing in gold bars or bullion is a sound idea to protect yourself financially against the current economic climate.

Value increases in line or above inflation

One of the most popular reasons why people invest in gold is to protect or in financial terms to ‘hedge’ yourself against inflation.  Gold is limited in its supply, and cannot be increased substantially, this means that as inflation goes up so does the value of gold.  Once purchased your investment value will increase in line with or higher than inflation, meaning that the ‘real’ value of your investment will be secure.

Demand is high

Demand for Gold is very high, investors are losing confidence in shares and cash, the share market is volatile due to the worsening economic climate.  Gold is seen as a safe option to invest in as it will always increase in value at the very least in line with inflation.  When demand increases, the prices will also increase as a result, it you buy before a sharp increase in demand you will earn a substantial gain in the value of your gold.

Gold Is Tangible

Gold is an asset, it is something that you can actually hold in your hand.  If you look at share investment, companies share prices are based on the valuation of a company, companies are closing down at a rapid rate at the moment and in one investment you could potentially lose your whole investment in a company due to factors like bankruptcy.  With Gold you do not carry that risk, the worst risk you have is a devaluation in the Gold on the market, you won’t lose your whole investment.  On the whole Gold prices are more stable than the stock market in the current climate.

 

Ways to invest in Gold

Gold Bullions

Invest in Gold Coins and Bars, you get to keep and store the gold, then when you are ready you can sell it.  It can cost a lot in secure storage and insurance to cover your investment.

Gold Exchange Traded Funds
Gold ETFs hold bullion as their asset, they are held as part of an investment portfolio and are treated in the same manner as stocks and shares.  They are traded on the exchange in the same way as stocks and shares so that you can sell them quickly when needed in the same way you would with shares.  It is a way of owning Gold  that can be sold quickly if needed.  An excellent option for someone who may need to get their hands on money quickly

Gold Mutual Funds 
You can buy shares into a mutual fund.  The Fund buys and sells stocks of gold, each fund will have its own asset management strategy, so you need to decide on the right mutual fund to invest in.  It is good for people who don’t want to spend much time working on managing your gold stocks as the Fund does all of the work and manages the strategy.

 

There are many advantages to investing in Gold especially in times of economic uncertainty.  Before you decide to invest in gold you do need to decide on the method to ensure that fits your financial requirements.


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