Many investors are skeptical about holding gold in their portfolios due to the volatility of its price.
However experts still recommend adding gold to provide diversification benefits and to act as an effective hedge against inflation. Gold is one of Investopedia’s top investments for this year, and with good reason—there has been a steady rise in its value, especially in the last quarter. In addition, the precious metal, unlike other assets, tends to not drastically go down when the markets hit new lows.
Of course there are some things beginners need to know about investing in gold in order to be successful. With that in mind, here are some tips on gold investment:
- A featured article published by, “Before It’s News,” said you should, “stick with the real deal”—this means a mixture of either gold bullion or gold coins is an ideal acquisition for beginners. Physical gold is simpler to understand and less risky than other investment options.
- Diligently monitor gold prices, said UK-based trading site Bullion Vault in its analysis. That way, if you hold ETFs or gold stocks, you can determine the appropriate time to buy and sell in order to rebalance your portfolio. Profits depend on how well you diversify and how well you manage your portfolio.
- A presentation by Silver and Gold Exchange advised that beginners should back away from gold futures because such investments are very complicated. It further predicted that beginners venturing into gold futures stand a good chance of severely underperforming; it’s better to leave this particular investment option in the hands of more experienced and seasoned investors.
- Financial magazine Money Week also imparted some wisdom saying investors should not, “have all [their] eggs in one basket”. A wide range of assets should be included, but gold should comprise approximately 10% of an investor’s portfolio.
You should take all these tips into account before delving into gold investments. That way you can be sure you won’t be plunging head first into a gold venture unarmed.
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