Gold is one of the safest and most reliable commodities in the world. Often overlooked as a potential career path, gold investing poses far less of a risk than most investment options, making it a viable solution for those looking at trading either professionally, or as a means of supplementing their income.
The value of gold is not a modern phenomenon. Prized by cultures across the globe since time immemorial, ancient through to modern civilisations have used this precious metal to trade. An eternal symbol of wealth, it should come as little surprise that there is money to be made wherever gold is in evidence.
However, what a lot of potential investors fail to comprehend is how many investment options gold presents. From bullion to futures, there is a gold investment to suit every trader. Here are a few of them to get you started…
Gold bullion is perhaps the simplest and most direct means of entering the world of this prized asset – it gives investors full ownership of this precious metal. Highly liquid, it is an ideal choice for those who don’t want their capital to be tied up and impossible to access. Gold bullion has the added boon of being one of the most low risk investments around, thanks to the unceasing demand for it, and its status as the ultimate safe haven asset. Many experts believe too that at current prices gold is materially undervalued.
Another, less direct way to invest in gold is through a gold-based exchange-traded fund (ETF). These specialised instruments are made up of shares, with each share symbolising a fixed amount of gold. Available for purchase from most brokers, ETFs are an ideal choice for small investors, as they have a low accessibility threshold and are very cost effective. Annual expense ratios are also impressively low, averaging less than 0.5 per cent.
Gold Mutual Funds
Mutual funds offer another indirect means of investing in gold. Well suited to small and novice investors, it is rare (although not impossible) to find a mutual fund devoted solely to gold investing, which means that an understanding of a variety of commodities is often required in order to trade successfully. However, their low costs and low minimum investment, diversification, and ease of ownership mean that mutual funds can be well worth considering for those that are short on time or capital.
Gold Futures and Options
Another means of investing in gold is through either futures, or options on futures. However, it is worth stating in advance that these are highly complex instruments, and thus ill suited to all but the most experienced of investors. Although they carry the benefit of low commissions, plus lower margin requirements than traditional equity investments, they are unlikely to yield trading success for those without the capacity to understand them. Additionally, their excessive volatility carries a number of risks that mean traders must be willing to approach them at their own peril.
If you’re looking for a new career path, or considering ways to supplement your current income, could investing in gold through one of these instruments be the ideal option for you?
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