How Gold Investing Beginners Can Get the Best Return

If the rise in the price of gold this year – combined with continued inflation and economic uncertainty elsewhere – has you interested in adding some of the precious metal to your portfolio, you’re not alone.

Novice Gold Investors are well placed to use the gold for diversify their portfolios and add value to their long-term investment plan. But it pays to do your research first – to decide how best to make your investment in gold to buy the right amount and know what to expect in terms of performance and growth. With a little preparation, you can set yourself up to maximize your gold investment and achieve your goals over time.

Learn more about how to start investing in gold today with a free information kit.

How Gold Investing Beginners Can Get the Best Return

If you are new to invest in goldkeep these three things in mind before buying:

Choose the right type of investment

If you want the chance to benefit directly from the value of gold, you can choose to buy gold bars or coins. You can buy gold bars from a reputable online or in-person dealer for any amount you want. Just make sure you know how you will insure your gold bars or coins and keep them safe, whether at home or with a third-party storage facility.

Another option for retirement conscious gold investors is a Gold IRA. These Individual Retirement Accounts work the same way as Roth or traditional IRAs that hold stocks, but you can use them to invest in IRA-eligible gold and other precious metals. To simplify the process, you can work with a gold investment company to make your gold purchase and find an IRS-approved custodian to hold it for you.

If you are not interested in physical gold bullion, you can also decide to invest in gold indirectly, through a Gold ETFs or shares in gold mining companies. You can make this type of investment and gain exposure to gold directly through your current brokerage. However, be aware that other factors such as company performance can influence the value of your investment.

Think a gold IRA might be right for you? Explore your options with a free investor kit!

Decide how much to invest

When investing in gold, it’s important to understand how best to use it as part of your overall portfolio.

“In order to determine the right amount of gold in a portfolio allocation, investment horizon and risk tolerance are very important factors to consider,” says Ohan Kayikchyan, CFP, Founder of Ohan the Money. Doctor.

While the value of gold increases over time, it’s not a way to grow your wealth the way traditional equity investments do. Instead, it’s a way to maintain value – and only requires a relatively small allocation.

“There is an industry ‘rule of thumb’ of allocating no more than 10% of the overall portfolio to gold,” says Kayikchyan.

This is because gold is best used as a diversifying item in your portfolio. With an endowment of about 5% to 10% at most, gold can help you through times of economic uncertainty, such as when the stock market goes down during a recession. But it also leaves a large portion of your investments allocated to riskier, higher-reward investments that can increase your long-term value.

Prepare to invest for the long term

Similarly, the use of gold as portfolio diversifier means you need to be prepared to invest for the long term.

gold price may fluctuate over short periods, although it tends to increase over time. With a long investment horizonyou can benefit from the overall stability and value of gold without having to worry short-term price decline.

Moreover, economic cycles of inflation and recession will occur at different times over the coming decades. And since gold, historically, is best used as a hedge against periods of inflation and as a store of value during economic downturns, you can continue to profit from your investment in gold for a long time.

Consider speaking with an expert today who can detail how the precious metal can fit into your individual portfolio.

The bottom line

If you are considering investing in gold today, you can set yourself up for success with a little planning before you buy. Take the time to choose the right one type of investment, including if you want to invest in physical gold. Determine how much you want to buy based on an allocation of 5% to 10% of your portfolio. And be prepared to hold onto your investment in gold for the long term, so you can maximize it over your entire investment timeline.

Explore more options for investing in gold today with a free informative guide here.