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If You Insist on Investing in Gold, Here's How to Do It

If You Insist on Investing in Gold, Here's How to Do It

(Getty Images/AFP/Andreas Solaro)

Charles Sizemore By Tuesday, 20 September 2016 09:52 AM EDT Current | Bio | Archive



When it comes to investing in gold, there’s more than one way to skin a cat. You can buy gold futures … or a gold-linked exchange-traded fund. You could keep a few coins in your sock drawer. Or you could go the tried and true route of burying it in mason jars in your backyard along with your emergency rations and ammo cache. You know, just in case.

For example, gold held for short-term speculation has very different considerations than bullion held as a long-term hedge or as crisis insurance.The form in which you hold this yellow metal will largely depend on why you own it in the first place. There is no “best” way to own the yellow metal. The way that is most sensible for you will depend on a variety of factors, including liquidity needs, tax status and privacy concerns, among others.

Today, we’re going to take a look at the various ways to own this shiny metal and why you might choose one way over another. Importantly, this is not a recommendation to buy gold. With the Federal Reserve itching to raise rates and with inflation still very muted, I’m not particularly bullish on the yellow metal. In fact, I’m actually short gold as a short-term tactical trade. (We’ll cover the ins and outs of how to short gold as well.)

But if you insist on owning gold, I’ll show you the best ways how.

Without further ado, here are five ways to invest in the yellow metal.

Physical Gold

The oldest method for owning gold is … well … actually owning gold.

Gold can be easily purchased in the form of one-ounce coins in virtually any city in America. Assuming the coins are not collector’s items, they will generally sell for a very modest premium to the current spot price of gold (a little over $1,300 per ounce, as I’m writing this). So, for a little over $13,000, you could walk out of the coin store with ten, 1-ounce American Eagles, Krugerrands, etc. in your jacket pocket.

For the higher rollers out there, you can also buy gold bars in various sizes. The most common is the 1-kilogram brick, which will set you back a little over $43,000 a piece at today’s prices. If you’re a drug lord or a James Bond villain, you might prefer the Good Delivery bars used by the world’s central banks (imagine the bricks at Fort Knox from Goldfinger). But at 12.4 kilograms, they will set you back over half a million dollars a piece … and you might need to hire a minion or two to lug them around, as they weigh close to 30 pounds each. 

To continue reading, see 5 Ways You Can Invest In Gold

Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog. As of this writing, he was long AAPL and MSFT. To read more of his work, CLICK HERE NOW.



Disclaimers: If I mention a stock favorably, you should assume that I have a position in it, both personally and in client accounts.  This does not, however, automatically mean that you should own it. I am expressing my opinions in this newsletter, not offering individualized financial advice or soliciting you to buy securities.  This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed.  See full disclaimer here.


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When it comes to investing in gold, there's more than one way to skin a cat.
gold, invest, fed, metal
Tuesday, 20 September 2016 09:52 AM
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