There are lots of reasons why people invest in Gold. Some are looking for a haven against currency or market depreciation, and others for an aggressive approach to make a profit. Whatever your reasons are, I think that you should have a clear understanding of the market system before you begin to dabble.
Gold is a commodity and is driven up or down by supply and demand. Hoarding and distribution play a prominent part in the precious metal market place, and this causes price to be based more on sentimentality rather than increases or decreases in production.
Metals such as platinum or silver have a high demand based on industrial usage, but gold is produced, not for consumption, but only for accumulation. To put it in another way, gold is similar to money and has no quality grades. It does not decompose or corrode, and that is the reason why it is so popular to a whole range of investors.
Choice of investment.
If you want to start investing in gold, you are spoilt for choice as to how to do it. You can buy it in bars, coins or bullion. Buy stocks in a gold mining company, gold futures and gold accounts. Which one is best for the complete novice is difficult to say, but I would advocate that gold stock and futures should be left to the professionals. As this is a beginner’s guide to gold investing, I would recommend an easier entry into the market place would be via gold bars and coins.
Coins and bars can be easily stockpiled and will maintain their value in times of economic dips. Some countries will allow you to open a gold account, and it is possible also for you to store gold with a private company in escrow if you have an account with them.
How much gold should you buy?
As this is a beginner’s guide to gold investing, it would be wrong of me to infer how much you as an individual should purchase. At the end of the day, your decision on how much you want to buy comes down to personal choice.
After you have decided the first issue of what to invest in, you need to be clear in your head how much capital to assign to your gold portfolio. Thriving investors in gold say that it is good to go for about ten to twelve percent of your overall investment portfolio in gold.
The risk factor in buying gold.
Gold is a relatively low risk investment , but is not totally free from danger. A beginner’s guide to gold investing would not be complete without dealing with potential problems a novice could meet.
To go into more detail than I can give you, you should do a lot of research on the Internet. In this market place, being informed means you have a good chance of success. There are a lot of forums and discussion boards out there in cyber space, and you can pick up some vital information about happening trends and future possibilities. Do not trust just one person, learn from anyone you find so that you get a broad idea of the market that you are entering.
Gold has always held a fascination for man and historically has been a secure and reliable currency. Gold has often been referred to as an international currency and remains so even today. There is money to be made, but it is an extremely complex market place and a beginner should seek expert advice. If you are keen to invest in gold via stocks then make sure that you invest in only the top 10 or so rather than investing in risky gold stocks.