We’re living in uncertain times – we don’t know what’s going to happen with global warming, or in the Middle East, or with the economy. Jobs are insecure, or under-paid, and many people are thinking about other ways to make money besides doing the 9-5 routine.
Gold’s always a good bet, as it always retains value. It’s valuable when the pound is high, but it’s even more valuable when the pound is low. Right now, it’s something of a bull market (on the upswing) for gold, and even if the economy picks up over the next couple of years, you won’t regret making an investment in it.
The good thing about gold is that it actually exists, which is how it retains its value. It’s not a bond, or an option– it’s real. This is acknowledged by banks all over the world, and so the price of gold isn’t subject to the same fluctuations as other commodities and “imaginary” financial.
So do you fancy investing in gold? Here’s a quick run-down of a few ways to do it.
There’s direct, physical ownership – we’re talking bullion. Gold has entranced humans for millennia, and no government or bank can substantially devalue this substance. If you’re interested in buying real gold to hold as a defensive asset (one you keep in reserve against currency devaluation), you’re on the right track – you won’t make much profit by selling it directly unless there’s a sudden value hike.
Then we have gold exchange-traded funds (ETF). These are a growing way of gold investing. It’s a mutual fund that uses a stock exchange, just like coffee, or good old pork bellies. The only stock on this exchange, though, is gold, as you might imagine.
If you don’t want to physically buy the gold, you can get onboard a gold mutual fund. These funds hold gold portfolios for you, and most of the stocks are with older, established mining companies that represent a safe, bet. The companies’ mines produce a predictable amount of gold each year, so you know what you’re getting into. You’ll pay more for these “senior” stocks, but you’ll make a steady profit.
If you prefer to pick up cheaper stocks, opt for junior ones. They’re cheaper, but they’re from less-productive or newer mines that aren’t as predictable. So, you might make a killing, or you might lose the lot! This is for the investor who can afford to lose a bit more.
The last option is – options. Options are for the experienced investor, though, as they’re very complex and involve split-second decisions, made with time limits and under a lot of pressure. You speculate on whether gold stocks are going to rise or fall in value before your option expires, and the nearer you get to the time limit, the less money you’ll make from your decision, even if it’s right. In reality, for a small-time gold investor, options aren’t the best way to make money, and it’s probably best to leave it to the experts – who also lose money on a regular basis!
