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3 ways for the average person to invest in gold
By Aly Yale,
14 hours ago
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There are a few different gold options that the average investor may want to consider, experts say. Getty Images
With the election fast approaching and in Federal Reserve policy looming, markets are uncertain. And that means it's more important than ever to diversify your investments . Gold can be a particularly smart option for this purpose, as it's long been considered a safe-haven asset , protecting your wealth during times of high inflation or market volatility.
In today's climate, it's also a quickly appreciating asset. In fact, the price of gold has soared over the last year and has hit multiple record highs so far in 2024.
"Gold has recently hit market highs as geopolitical risk across the globe has increased and inflation has been persistent," says Daniel Gilham, a certified financial planner and director of advisor strategy at Farther.com. "The fear of the U.S. debt balance causing the dollar devaluation has investors seeking a safe haven from traditional investment assets."
Are you considering investing in gold , too? Here's how experts say you can get started.
If you opt for coins, commodities expert James Cordier recommends the American Gold Eagle.
"They're extremely liquid with very little premium to purchase above the current spot price," says Cordier, founder of the Cordier Commodity Report. "When its time to sell you can easily contact one of many dealers, and receive the going price. They come in different sizes, but one ounce is probably the most common."
If you're looking for the lowest cost option, gold bars are generally cheaper than coins, as they're more generic, according to Ben Nadelstein, head of content at precious metals marketplace Monetary Metals. They also come with other perks.
"Purchasing a one-ounce bar from Costco cuts out the shipping costs from online purchases and avoids the privacy risks of buying from local coin shops, while still giving you ownership of the physical metal," Nadelstein says.
You can also get exposure to gold by buying into a gold exchange-traded fund (ETF) . These are pooled investment funds that are made up of various gold-related investments. You can purchase shares of them , as you would on the stock market.
"For most investors, gold and precious metal ETFs or mutual funds are the best way to begin building an allocation to gold," Gilham says. "These positions will track the price of gold, but not generate any income through dividends or yield."
Just make sure you do your research before choosing which gold ETF to buy into. "They do come with fees you should be mindful of," Nadelstein says.
"As the price of gold increases, so do the profits of these mining companies," Gilham says. "This gives an investor the ability to participate in the upside of gold prices while receiving a dividend from the gold mining operating company."
But again, it's important to do your research, as not all gold mining companies are going to deliver the same returns.
"The most widely held gold mining stock is Barrick Gold, but it's becoming more clear each day that they hedged a large amount of future production at much lower values than the current price, leaving the investors with very little possible upside," Corridor explains. "Gold has performed extremely well over the last five years — up approximately 65%. Barrick Gold is up a whopping 6% over the same five years. Ouch."
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