5 Top Ways to Invest In Gold

Gold has been a valuable commodity for thousands of years and continues to be a part of financial portfolios for many investors. Prices may rise and fall, but gold retains value as a security measure for your investments.

Here are five of the top ways to invest in gold.

1. Direct Ownership
Direct ownership gives you the opportunity to take possession of gold and keep it yourself. Buying gold coins is an easy way to invest because they are sold in various denominations so that the cost can fit your investment strategy, according to Daily Reckoning.

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Gold coins are sold through a dealer network authorized to sell gold and made up of wholesalers, brokerage firms, coin dealers and participating banks, CNBC reported. Only buy gold from reputable dealers.

Gold jewelry should have a high karat level (24K is considered pure, but gold jewelry may be as low as 10K), and get a certificate of authenticity to verify the purity of the gold, CNBC said. This helps when you want to sell it and have proof of its value.

2. Gold Certificates
Gold certificates are a good solution for people who want to own gold but don’t want to secure it against theft and are comfortable with it being stored elsewhere, Forbes said. Investors can buy the gold and receive a certificate verifying ownership. The gold is then held by the issuing bank. There are some fees that come with this method, so factor that into your costs.

3. Gold Exchange-Traded Funds (ETFs)
Gold ETFs have become popular among investors. A share of a gold-backed ETF effectively amounts to 1/10 of an ounce of gold, TheStreet reported. The company buys gold to ensure stock is backed and when an investor wants to sell the gold, the company buys it back if there are no other buyers.

4. Gold Mutual Funds
A mutual fund is an investment tool where multiple investors pool their money and the investments are managed by professional money managers. Gold funds offer a way to invest in the gold sector and tend to be a stable and safe way to invest without buying the metal itself, Forbes explained.

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5. Stocks
Buying stock in gold-mining companies is not a strategy for the faint of heart. It takes some research. Look for companies with a history of successful production records, good management and a healthy inventory, the Daily Reckoning advised. Be wary of junior stocks issued by newer, smaller companies. They may be less expensive, but that’s often because the risk is greater.

Some investors use gold as a safeguard against disasters or a way to pass wealth to children. Gold may be a great hedge against inflation because as the cost of living goes up, the price of gold generally rises.

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