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Gold bars stacked on a table

Looking for a New Investment? Consider Purchasing Gold

How to Buy Gold

People looking to make the most of the surplus money they have lying around often try investing it. By investing money, they take a risk of putting their money into a concept or item in hopes that its worth will fluctuate in their favor.

A smart investor will make sure to put their money towards something that’s worth it. They will also do their research to find something that tends to fluctuate in price. Many people turn to gold for their investment opportunities.

Why do People Buy Gold?

Gold is something that is often synonymous with wealth. Throughout history gold has been something sought after and highly valued. The gold market is something that often fluctuates over time just like the stock market and currency.

Many people even consider gold to be a sound and safe investment in the case of economic collapse. If the stock market crashes, you would still have gold to fall back on that will still hold some value.

Getting into buying and selling gold is something you should always think about, as it is not as straightforward as you may think.

Buying Physical Gold vs Gold Stocks

If you want to learn how to buy gold you have two different options: buy physical gold, or you can try gold stocks.

As its name would suggest, buying physical gold refers to purchasing items such as gold bars, raw gold, or even watches and jewelry.

On the other hand, gold stocks are a little bit different. When you buy a gold stock, you aren’t investing in “gold” itself. Instead, you are investing in companies that work with gold. Generally, these are companies that own large amounts of gold or mine the raw ores.

There are advantages and disadvantages to both forms of investment.

Understanding the Pros and Cons

Physical Gold
With physical gold you have tangible items you actually own. There are also a ton of other things you can invest in: coins, bars, and jewelry, to name a few. Physical gold tends to come in handy during an economic crisis as many people consider it a “backup currency.”

There are some things you must deal with to store your gold legally and safely. For one thing, if your gold investments are part of your 401(k), the IRS requires that you store it properly. Generally, you also have to insure it and pay yearly fees. Keep in mind this is just for the investment gold that you have for your Precious Metals IRA. You are more than welcome to keep your gold jewelry home.

Gold Bars as an Investment
It is a good idea to consider gold bars over other gold items. When it comes to buying jewelry like rings or necklaces you end up paying more than they are actually worth. This is because you end up paying fees for the design of it. Generally, these pieces of jewelry are worth much less than what you pay for when you go to scrap them at a pawn shop.

Gold Stocks
These function as any traditional stock, meaning they are very easily sold if they need to be. Selling or trading can happen rather quickly and be hassle-free. This also means that you don’t need to worry about storing or insuring it.

With physical gold you run a much greater risk that your investment can be stolen or damaged. On the other hand, it also means that you do not actually own gold. This means that you don’t have the same kind of financial protections mentioned earlier in the article.

If the stock market crashes, so do your gold stocks. You really need to consider what exactly you are investing in. While there is generally a direct relationship between the worth of a gold company and the worth of gold, there are some other components to this.

Mines can fail to find gold, and job organization can be horrible. Even if gold prices are up, the value of your stocks can drop if the company itself is going under or experiencing strikes. Its value also seems to fall in line with the general stock market and economy, which is the exact opposite trend from what you see with physical gold.

What to Look For

Make sure to buy from a reputable dealer and do your research beforehand. If something seems too good to be true, it probably is. Ask for certificates of authenticity before you make your purchase. Try to research gold prices and buy when the values are lower.

What to Avoid

Do not buy expensive jewelry with the idea of investment in mind. Do not buy gold when prices are especially high unless you expect there to be a surge in prices. And lastly, be sure to never buy gold from a shady or unreputable dealer.