These tips will show you how to invest in gold. There is no better time to invest in gold, and gold investing is one of the safest ways to diversify your portfolio. Investing in gold gives you protection, insurance against inflation and global uncertainty. However, if you are a beginner in the gold market, you need to understand some basics about how to invest in gold. I just did a gold 401k rollover but did a lot of research before hand.
A premium of gold is the quoted price minus the spot price, divided by the spot price and multiplied by 100. Long term investors should buy gold close to the spot price. If you are planning to use the gold as you would money, then the premium price is the price that you will probably pay. The general rule is that individual investors should not pay more than 10% more than the price of the spot gold. Gold coins are generally an investment that does not recoup the value paid, as these coins come with large premiums. Therefore, the advice is not to buy coins unless you are an expert or are willing to consult an expert about the value of these coins.
In understanding how to invest in gold, you must understand the concept of gold ETFs. A gold ETF is a gold exchange-traded fund. This means that you do not own the physical metal – rather, you own shares. Each of the shares is generally worth the equivalent of 1/10 of an ounce of gold. ETFs may be allocated or unallocated. Allocated ETFs are shares in actual bullions held by the big banks that issue these shares. Unallocated ETFs are shares in gold futures. After selling these unallocated shares, the issuer of these shares has a set amount of time in which to actually have the gold bullion delivered into their vault.
However you choose to invest in gold, you should dollar cost average. This means that you should put a fixed amount of your money towards gold each month. This means that the risk of investing in gold is spread out over a period of time.