Those who have made the decision to purchase gold have quite a few options. Whether the individual wants to buy gold coins, stock, or bullion, investing in gold is a way to diversify the portfolio. In some forms, gold also hedges against inflation and the declining value of the dollar. Some forms of gold are riskier than others and ownership costs and liquidity varies. There are several popular ways to add gold to the portfolio.
Bars of gold bullion can be purchased in weights ranging from one ounce to over 100 ounces. Investors can buy gold coins from coin dealers, banks, brokerage firms, and the U.S. Mint. There will be a premium or commission fee associated with coin purchase and individuals should determine whether they want gold bullion coins or collector coins. Coins and bars can be stored within a bank safe deposit box or at a storage company that specializes in holding gold.
If the costs of storing gold are prohibitive, the individual should consider gold exchange-traded funds. Some of these, such as streetTRACKS Gold Shares and iShares COMEX Gold Trust, roughly track the gold price and make an investment in actual gold bullion. There are some low fees associated with these exchange-traded funds. If a broker is used, there will be a commission fee.
Gold stocks represent an investment in a publicly traded gold mining company. These stocks are sometimes more volatile than exchange traded funds. Investors indirectly receive a stake in the gold reserves of the mining company. The mining stock reflects the profits of the mining company.
Gold mutual funds offer lower volatility than most other gold stock market investments. Some, like U.S. Global Resources Fund, offer exposure to other commodities. Transaction fees vary and the investor may be charged a fee if shares are sold before a specified holding period.
Tags: buy gold, invest in gold