Human beings have been hoarding gold since biblical times, and thats never changed.
In fact, gold is having kind of a moment right now.
The price of gold is up.
You might strike it rich if you vacation at one of theseseven places in America that let you pan for gold and more.
More people are investing in gold because theyre afraid of stock market fluctuations and the possibility of a recession.
The problem is, investing in gold can be a real challenge for beginners.
The sheer number of investing options available to you could be overwhelming and confusing.
Its way too much, really.
Were here to demystify those choices.
How can you as a beginner invest in gold?
Also,shouldyou invest in gold?
We spoke to some financial advisers, and theres not necessarily a simple answer to that question.
No Interest Til Almost 2027?
Physical Gold
This is what most people think of when they hear the phrase investing in gold.
You could collect your own little dragons hoard of the shiny stuff itself.
Gold bars are larger, more expensive and harder to sell.
So youd be looking at spending $2,000 to $20,000 on a single bar of gold.
Just know that youre probably going to pay a little extra to cover the sellers overhead.)
Gold coins are a more realistic buy for most small investors.
They can be purchased from a reputable dealer in any decent-sized city or online.
you could look up gold dealers onTrustpilotto see how their customers are scoring them.
It can be hard to make your money back if you decide to sell them later.
It should also be insured.
They think theyre going to have gold bars lying around the house.
You dont have to go that route.
OK, so thats less fun than holding a gleaming gold bar in your hand.
But its a lot easier.
The fund might also invest in gold bullion.
Its easy to purchase a gold ETF through an online brokerage account.
However, you should know that investing in gold doesnt have a history of outperforming the stock market.
Historically, gold underperforms stock funds, said Demetri Kolokouris, co-owner of the online gold exchangeExpress Gold Cash.
But trying to outperform the stock market isnt why most people invest in gold.
The price of gold is independent of what the stock market happens to be doing at any given time.
In fact, gold and stocks have a bit of a love-hate relationship.
Like an exchange-traded fund or mutual fund, a gold IRA invests in a number of different gold-related assets.
Gold Jewelry
Gold jewelry is certainly nice to own, but its not really the best investment.
Were going to quote from The Penny Hoarders article onhow to sell your gold jewelry.
Gold was already on an upward trajectory in 2019, but from 2020 onward, its comparatively skyrocketed.
Like we mentioned before, youll findcurrent gold pricesonline, but only institutional sellers get the spot price.
Companies that buy your bullion or jewelry pay for advertising, overhead, melting jewelry, etc.
and they have to make a profit so they buy below spot.
Gold Mining Companies
You could invest in the individual stocks of gold mining companies.
But frankly, one big advantage of ETFs and mutual funds is that theyre less risky than individual stocks.
Gold Futures
For beginning investors, we recommend skipping gold futures entirely.
Basically, its really complicated and you could lose a lot of money.
Just skip this one for now.
Lets look at the benefits first.
It Holds Its Value in Difficult Times
Gold is the ultimate safe haven.
Its value is not tied to any one countrys currency or economic performance.
Golds history in this role speaks for itself.
Spread the risk around.
Gold can provide diversification benefits to your investment portfolio, said financial coachMichael Ryan.
There is a well-established global market for gold, and it is traded 24 hours a day.
The Drawbacks of Investing in Gold
Now lets take a look at the cons.
It Has to be Stored
If you buy physical gold, you have to store it somewhere.
The Bottom Line
Should you invest in gold?
Maybe, but not too much.
It should be a relatively small percentage of your overall investment portfolio.
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.
(Can you sense my millennial sarcasm there?)
You know which ones were talking about: rent, utilities, cell phone bill, insurance, groceries…
