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Essential Gold Investment Advice for Beginners

Essential Gold Investment Advice for Beginners

A gold coins or bullion investment is great if you want to protect yourself from drops in the stock market, currency problems, inflation and deflation. Precious metals are often used as a hedge against more volatile investments. Here are some great tips for the beginner looking to buy gold as an investment.

Tip 1 - Go for gold coins or bullion

If you are beginner to gold as an investment, start out by investing in gold coins or gold bullion. These are simple to understand, simple to acquire and offer the least risk. Shortly after purchasing gold coins or bars, you will receive them via a delivery company. Gold coins are light, and easy to transport and store. If buying large quantities then gold bars are a little cheaper, but more difficult to deal with as they are heavier and bulkier.

Tip 2 - Stick to the metal

As a beginner, avoid gold futures. 9 out of 10 people who try this come out as losers. Gold mining shares are less complicated, but still risky, as they have nothing to do with the price of gold itself. If gold goes up in price, this does not mean that gold mining shares will appreciate too. Leave these to the experienced investor.

Tip 3 - Don't hang around

Don't wait to buy gold. Of-course, don't buy if prices are particularly high, due to sudden a surge in interest in gold (which often occurs when stock markets fall suddenly, as they did in 2008). Buy gold when you need it. It is not a stock or real estate investment, and timing is not vital. Gold as an investment diversifies your overall wealth, and is not affected in a negative way by economic dangers.

Tip 4 - Get your portfolio well balanced

Experts recommend that the middle of the road investor purchases gold so that it is at 10 to 30 percent of the portfolio. Exactly where you go between those figures depends on the current financial and economic situation.

Tip 5 - Don't save on amateurs

A professional gold firm is essential for the beginner looking to shorten the learning curve. A good firm will steer you away from the possible problems that you may face, and ultimately save you money. A reputable gold broker will help you select the right gold product mix, and make sure you are paying the right prices.

Tip 6 - Stay away from antiques

Many investors buy a gold investment that has little to do with their objectives. Safe-haven investors comprise about 80% of the physical gold market. Instead of just adding coins to their portfolio mix, many of these investors end up with a leveraged gold position or a few rare and very expensive gold coins. These are not what is required for safe-haven investing, and most investors should avoid them.

Image by: Lars Plougmann