The Ways of Investing in Gold: Which Is the Safest and Most Profitable for You?

Investing in Gold: The Four Ways You Can Buy In

While there are a number of ways to buy exposure to gold in your portfolio, only one gives you direct exposure to the actual physical asset:

Buying gold bullion or gold coins.

Look at what you don’t get with these other methods:

• Gold Futures: Do you have a crystal ball? Or are you more of the risk aversion type? You’ll need to be if you’re looking to invest in futures. A $5,000 margin account buy gets you the right to buy or sell futures on up to 100 ounces of gold. When the price ticks up, Hallelujah!, you’re in the money! When it ticks down––which it can do––kiss your hard-earned savings goodbye. Keep in mind, futures are for gamblers only!
• Mining Stocks: While mining stocks are a way for the investor to leverage higher gold prices through corporate operations, you’re still only buying shares of a company rather than the metal itself. It also exposes you to all of the company’s operating risks and management misdeeds. Problems like acquisitions gone bad or mining snafus can cause the stock price to drop while the price of gold itself climbs. In addition, you’re exposed to all of the downsides of the stock market that you’re presumably buying gold to protect yourself against.
• ETFs: While ETFs (Exchange-traded Fund) can be a less expensive way to gain exposure to gold, it still suffers from many of the same problems as mining stocks. And once again, mining ETFs are just as subject to the whims of the broader equity market as they are to the price of gold.

What You Get with Physical Gold that You Don’t Get Any Other Way

Unlike a paper asset, gold has been viewed throughout history as a store of value. It is an essential currency that cannot be manipulated by the interest rate policies or debased at the whims of any one government.

• Gold has traditionally been used as a hedge against inflation. As the world’s currencies decline, money moves to gold in order to take advantage of its traditional protection.
• Gold is growth: No other paper investment in the last 10 years has had the return on investment that gold has––over 300%!
• Gold is a security that is uncorrelated with stocks and bonds. Gold has traditionally gained in value as the stock market plummets and investors look for more stable investments––for this reason, having gold in your portfolio helps to reduce overall volatility.
• When you own physical gold there is no counterparty risk, no worries about the “promise to pay” of paper assets. As has been said, gold is not an investment, gold is real money.
• Gold is the ultimate liquid asset. It can be sold easily and quickly.
• Because gold does not correlate with stocks and bonds, gold offers an asset class that gives your portfolio greater diversity and balance.

Gold Is Your Future, Protected

To get a look at gold’s possible future, let’s look at its history: An investment of $100,000 made in 2001 would have a market value today of just under $440,000––this even takes into account the market correction of the past two years. The average annual return over this period was just over 12%.

Now, look at stocks during the same period (at the 18,000 level for the Dow Jones Industrial Average): Stocks averaged just a 4% annual return! Don’t forget, during this same period stocks had the benefit of two bull markets while gold had only one! A 12% annualized return in a no yield environment (i.e. what principal remains calculating for inflation) represents a phenomenal return.

Learn More About Investing in Gold

Every day you wait to protect yourself, your family, and your wealth against future financial uncertainties is another day you’re putting your retirement at risk. Don’t let your portfolio be missing the one thing that can provide you with a hedge and serve as protection in all seasons and under most circumstances––gold.

Transferring a portion of your IRA to gold can help to protect your retirement from the highly fluctuating stock market. But before you do anything with your money make sure to do your homework and get the best information available.

To do this you can begin by downloading a FREE mini-course that was designed to help answer many of your questions about gold and silver investing and coins. Full of important money saving investment tips, this guide has helped teach many of our clients to invest like experts. If you’d like to save precious time and possibly thousands of dollars, you need to read this today!