It is the irrevocable nature of the economy that causes a wide variety of inexorable phenomena like market fluctuations and inflation. Gold has been seen as a viable hedge fund for a long time during times of financial uncertainty and, indeed, it is the opinion of many experts that this is all it should be used for. However, some of the investors addicted to the high-risk, high-reward game are willing to play with gold in order to make more money. Whether it’s a viable alternative to any other form of investment or not depends on a wide plethora of factors, but as usual the best way to be confident in anything in an uncertain economy is to have a truly diversified financial portfolio, concordantly spread in different fields and involving different methods. Of course, knowing how much, when and how to invest isn’t as easy as it sounds, otherwise everybody would be doing it successfully, ergo everyone would be rich, which is an impossibility in a system based entirely on competition; in order for one person to win, a significant number of other people need to lose – that’s how investments work. Still, this doesn’t mean that you can’t enter the game on your own and stand a fair chance. Investing in gold is a bit risky, but the risk in many cases is absolutely worth it because the return of the investment can be staggering if you’ve done everything right. But how can you invest in gold?
Exchange-traded Funds (ETF)
Back in the day, the vast majority of people who were getting into gold investment strategies preferred the standard purchase of physical gold in various forms, but this method is not really all that viable today for several reasons. First of all, it requires more major investment potential and purchasing power as gold had to be acquired in more larger quantities for the purchase to hold any real potential for return. Secondly, it was much harder to actually store the valuable metal and even basic transportation was a nightmare.
Today, the majority of people investing in gold choose exchange-traded funds and even though this option has several disadvantages, it’s still one of the most prominent and simple methods to actually get into this sort of investment.
When one acquires ETF, they don’t get physical gold, so the problems associated with the purchase of the metal are solved right off the bat. ETF are investment funds which also makes them much easier to trade. They are also not taxed in the same way material gold is which brands them even more viable. ETF is beyond VAT, sales tax and transaction taxes so there is nothing to bother you about taxation. The only downsides are the commissions agencies issue for managing it, but this is a small price to pay in general. Overall, this is one of the best methods of gold investment you can choose.
Futures are the type of contracts one can easily call ‘gambles’ if one isn’t familiar with the market and different price fluctuations and tendencies. Of course, if you posses that knowledge and the skill required to make accurate predictions of the state of the market, then you can easily make money using future contracts. These contracts represent transactions that are supposed to be made in a predetermined date with preset prices. This is a very risky way to invest in gold, but if you’re good enough and know the market functions, you can collect a significant return.
Gold Collector’s Items
This is one of the more unconventional methods of gold investment. Basically, it’s a form of trading gold to collectors with certain items of collection value. What you need to do is purchase such items and then look for collectors who are willing to pay more than what you did when you acquired the said item. Usually, the value of the item is much higher than the gold it contains. Such items can vary from coins to statuettes to anything else a collector can find of worth. There are two challenges when employing this method – one, you need to be familiar with the values of the items you’re trading; and two, you need to find people willing to pay enough for it so the market for this isn’t really sure. But then again, investments never are.
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