Published on November 27th, 2012 | by Pete0
Is Gold Investment The Right Move For You?
In the current economic climate it can be difficult to decide where your investments are best placed. Property has traditionally been a firm favourite, until recently when the credit crunch hit and prices fell dramatically. Some suggest, that with prices still low, now is the ideal time to invest in property. Others believe that there are better investment alternatives, which will deliver greater yields in the short term whilst the housing market returns to a position of strength.
Whilst this is all well and good for expert investors who are confident of buying shares in various sectors; it isn’t ideal for the common person who has less knowledge of the investment. So, where do they turn to now the option of property investment isn’t as attractive as it previously was? Well, many are now turning to gold investment.
Is gold investment a complicated affair?
The truth is that investing in gold can be as complicated or as simple as you want it to be. The more complex routes include:
- Buying options and futures (speculating against whether price of gold will rise or fall)
- Exchange traded funds (bought and sold on stock exchange like other shares)
- Mutual funds (buying shares in established gold mines)
- Junior gold stocks (buying shares in less established gold mines)
All of these can be quite daunting – especially for someone who is just looking to dip their toe in and see how warm the water is. However, you do still have the much simpler option of investing in physical gold.
How do I purchase physical gold?
Gold bullion can simply be bought from a gold merchant – usually in the form of gold bars or gold coins. The amounts you wish to invest will of course dictate the size of the gold bar or number of coins you buy. The buying process is completed in three simple steps:
- You inform the gold merchant of the amount you wish to invest in gold bullion. At this point the price is fixed and will not fluctuate in line with the gold price on the stock exchange for a set period, giving you the opportunity to complete the transaction.
- You then make the payment for the gold by bank transfer, cheque or even cash if you wish.
- Once the gold merchant has established that the funds have cleared, the bullion will be delivered to your chosen address by way of a fully insured service.
If you prefer to collect your purchase from the merchant personally, you must first inform them of your intention, as gold is never kept onsite.
What are the benefits of buying gold bullion?
The first and perhaps most important benefit of gold bullion investment is that it has a proven track record of delivering a solid return. So, whilst the price may fluctuate over short periods of time; historically it has continued to rise and there is no reason that it will not continue to do so. This is due to the fact that gold is a finite resource. Demand for the metal continues to rise as the world’s population increases, yet the level of gold production cannot keep pace – thus steadily driving up the price.
The second benefit is that gold is very easy to liquidate if the need arises and you can sell it rapidly. For this reason, many expert investors will have some physical gold in their portfolio. This gives them the flexibility to quickly get their hands on some cash, if they see another investment opportunity that they wish to take advantage of.
Is there anything else I need to know?
As we have already mentioned, your gold bullion will be insured by the merchant up until it is delivered to your property. Once you sign for it, the gold becomes your responsibility. Alternatively, if you decide to collect the gold, it becomes your burden as soon as you leave the gold merchant’s premises. It is therefore essential that you have the right insurance in place before you accept delivery or collect it.
Finally, you should look to have additional security in place at your property to protect your investment. A burglar alarm will usually be a must before a company will agree to insure your gold, as will a safe or strongbox.
This is a sponsored post, and was provided by UK Gold Bullion.