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6 Ways to Invest in Gold

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					          6 WAYS TO
            Invest in Gold
6 Ways to Invest in Gold


There is something exciting and exotic about owning gold. Gold has been a standard
form of currency for a very long time. Gold can provide protection against inflation and
many financial advisors recommend owning some gold in your portfolio.


There are several options for being invested in gold; some of them are direct, like
owning gold bars. Others are indirect, like owning stock in a gold mine.


Let's look at your options:


   1. Gold Bullion:While most people think of gold bars, the term 'gold bullion' applies
      to any pure or nearly pure gold with a certified weight and purity. Smaller bars and
      coins are more practical for most people. One large gold bar worth $250,000
      isn't easy to chop in pieces if you need some of that money now.

           Gold coins and smaller bars can be purchased from dealers for a 1-3%
           premium over the value of the gold they contain. The values of coins are
           easy to determine in the financial marketplace and dealers are easy to find
           in decent sized cities.



           However, insurance and storage costs could use up part of your
           investment funds, so it’s a good idea to consider these fees when looking
           at the feasibility of investing in gold coins.



           Common gold coins include the South African Krugerrand, the Canadian
           maple leaf, and the U. S. eagle coins.




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2. Exchange Traded Funds: This is the easiest way to own gold, since you don’t have
   to store or insure it. One share of an ETF is equivalent to a specific amount of
   gold, frequently a fraction of an ounce. These shares can be bought and sold just
   like any other mutual fund share or share of stock.

        The annual expense of owning these shares is quite low; usually less than
        0.5% annually; this is better than the expense ratio of most mutual funds.



3. Mutual Funds:There are many mutual funds that own gold in some form, but
   there are relatively few that invest in gold exclusively. Most of these funds
   invest vertically in gold related businesses. This means they invest in gold
   bullion, the mines and other related real estate, the mining companies,
   distribution, and more.



4. Futures and Options:These provide a vehicle to bet on the future price of gold.
   You can purchase the right to buy or sell gold at a predetermined price within a
   predetermined span of time into the future. This type of investing in gold can
   carry a high risk and involve complex techniques, so be sure to research strategies
   before you commit.



5. Gold Mining Companies:Many gold mining companies issue stock just like
   other publicly traded companies. These can be found on the various stock
   exchanges. As with any stock, doing your homework on the company you’re
   investing in is critical.

        Keep in mind that there is always a surplus of gold in the world; the actual
        commercial demand is very low relative the supply. The value of gold is
        almost entirely dependent on investor sentiment.



6. Jewelry:This is a very difficult way to invest in gold, as the value of the jewelry
  is often much greater than the underlying value of the gold in the jewelry. In
  general, the only person making money on gold jewelry is the jewelry shop
  owner.


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                                   There are many options to invest in gold. Bullion can make sense for larger investors
                                   with the ability to store and insure that gold. The average person that wants
                                   exposure to the price of gold would be better served by owning shares in an ETF or
                                   gold-related mutual fund.


                                   Those with an aggressive stream can look into options and futures. Owning stock in
                                   gold companies themselves is another option if you have the time to do the research.


                                   Each of these options could work for you, depending on your situation. If you want to
                                   invest in gold, your best option is really to choose the vehicle that works best for
                                   your investment needs.




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Curtis Rose is an experienced professional with extensive experience in all
aspects of personal finance. Curtis writes and publishes articles, courses,
guides and special reports on his personal finance blog. Sign up for his
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               http://www.PersonalFinanceDashboard.com

				
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