Investment in bullion! The idea is getting quite popular especially when the yellowish metal is picking up in price almost with every passing day. Most of the people are still novice in this regard and really confused as to when they should make investment in gold and how much. For the prospective gold investors, here is a question-answer session as guidance
Which type of gold should I invest in?
It is the most common question thrown towards the gold traders and financial advisors. The answer depends on the purpose of buying gold. Some buy gold to consolidate their financial standing and reap benefits out of its upward price movement. For them, I suggest buying of contemporary gold coins. However, those seeking capital controls through gold seizure, investment in pre-1933 gold coins sounds wise. Both the historic and contemporary bullion coins are traded at modest premium which is higher than their melt value. So, keeps a tab on gold price to experience rewarding liquidity anywhere in the world.
What is the right time of investment for me?
The straightforward answer is when you actually need to own it. Gold investment is not similar to real estate or stock investment, so approach must be different. Timing is a factor but it is more important to know if gold investment will hedge your financial security. If the answer is ‘yes’, don’t wait for a favorable timing, instead make a purchase immediately. For strategic planning, you may adopt cost averaging approach. The objective is to diversify your investment portfolio so that it does not get affected by economic crisis that the world witnessed in 2008 and what is going in Europe at present.
What is the demography of the gold investors?
Contrary to popular belief that only the top and middle tier businessmen own gold, we see a different picture wherein the profiles of gold investors represent different sections of a society’s economic clusters. Obviously very poor people are not enlisted but strangely, many common men around us investment money in gold. They are teachers, doctors, engineers and other creamy layers of the society along with plumbers, tailors, masons considered to be at the bottom of social structural pyramid. These people consider gold as an investment asset due to the potential returns they get. Gold fluctuates less in price and so make a safe investment choice for many, irrespective of age, gender, nationality and income slab. According to a recent survey, 34% of the US citizens have rated gold as a higher investment tool than other alternatives like bank savings, real estate, stock, bond etc.
Gold is insurance, as claimed often. Really is it so?
Unlike bonds, stocks, bank savings or other investment vehicles, gold is not other’s liability, a feature that enables someone else to pay for the capital asset. No matter what happens to the economy, even if the bond, stock or real estate price hits the historical low, gold can always be bedrock of your investment, thereby insuring your wealth amidst any kind of economic turbulence.