Once an individual has committed to investing in gold, the question arises regarding what form of this precious metal the investment should take. There are so many options, from the physical to the abstract, that a person can easily become confused. Often, it boils down to whether one should invest in gold coins or gold stocks.
The decision to buy gold coins is quickly made for some because they are seeking an easy investment option. Coins can be purchased from a dealer or online and there are books and electronic guides that provide information regarding which are most valuable. The safest way to invest in gold coins is to purchase them based on their gold content, not how rare they are. The easiest coins to buy based on this methodology are the Canadian Gold Maple Leaf, the South African Krugerrand, and the American Gold Eagle.
There are some drawbacks to purchasing gold coins and these come in the form of fees, taxes, and storage requirements. Dealers mark up the coin prices and depending on where the coins are purchased, there may be shipping fees and sales tax. Once the individual has the coins in-hand, the items must be insured and a storage location will need to be found.
Gold stocks are another way to own gold and they do not require the acquisition of a physical product. There are gold exchange traded funds (ETF) that feature low commissions and are a protected investment. There are also gold mining stocks that offer an additional leverage to the price of gold. When gold increases in price, the current production of the mine and the reserves in the ground become more profitable. However, investors must do their research and purchase worthwhile stock in order to make a profit.
The decision to either buy gold coins or gold stocks is a personal one and each option has benefits and drawbacks. Gold coins are beautiful and can be quite valuable, but they need to be stored and insured. The value of gold stock can increase above the actual price of gold, but only if the right stock is selected.
Tags: gold coins, gold stocks, investing in gold