Your Questions About How To Invest In Gold

Richard asks…

How can I invest in Gold ETFS? Is it a good option to invest in Gold ETFs?

John answers:

This exchange trade fund, symbol GLD, tracks the price of gold as a commodity and not gold and gold mining income. It is an excellent inflation hedge. You can buy it over the New York Exchange under symbol GLD.

Charles asks…

How can i invest in gold?

Does anyone know, how to invest in gold

John answers:

You can buy some gold ETFs such as

GLD
GDX
IAU

Betty asks…

How to invest in gold?

Finance analysts recommend keeping up to 10% of ones assets in gold. Though gold is a safe investment option, its biggest problem is liquidity. Banks selling 24 carat gold coins are over prized and they do not buy them back. One may buy gold from open market and stock in bank lockers. But, if he goes to sell that at jewelers shop, it is sold at below prevailing rate.

John answers:

Open up a brokerage account and buy GLD
It is just that simple.
Be careful, if the market starts picking up, and the economy recovering gold could drop back down, and drop down fast…

Nancy asks…

How ca I invest in gold?

I don’t want to get the gold in coins or other forms, I want to get a document that entitles me to it.

John answers:

There are many ways to invest in gold where you receive a document that “entitles” you to it, thereby eliminating the responsibility, hassle and cost of storing and protecting it. There are some slight differences between the different types, which I will explain below.

Allocated Storage: This is where you buy the gold, and a bank or mint store the gold for you. In this form, you have rights to actual gold bars or coins that are physically held for you in the firm’s vault. In return, you pay a storage fee on an annual, semi-annual, or monthly basis. One interesting option here is GoldMoney, which has no minimum to invest, and which allows you to convert your investment into several different currencies instantaneously. There are many others, all with their own set of fees and policies.

Unallocated Storage: This is where you invest the gold, and you hold rights to the gold you own, but you do not own rights to specific bars and/or coins. Instead, you own a share of the pool of gold that is held by the bank or mint. You agree to let the bank or mint use your gold as working capital. In a mint, this means they use the gold in minting operations, and in a bank it means they can use it as their cash reserve. In return for letting them do this, you get free storage. Most of the gold held by investors is held this way. Critics say the investor is particularly subject to default risk in this scenario, because if the bank or mint becomes insolvent, the gold investor doesn’t automatically get his/her money out. You can exchange your certificate for the gold itself by requesting your gold to be formed into bars (for a fee.) There are often minimums in a program like this. One such program, the Perth Mint, offers a guarantee from the Australian Government on any gold invested with the program. The minimum in this program is $10,000.

Gold ETF (GLD): The gold ETF is a convenient way to invest in gold. However, it does not give you “rights” to the gold per say. You cannot cash in your shares for actual gold. You can only sell your shares on the market. So what you really own here is a promise in the form of gold backed shares of stock. The pluses are convenience and the fact that the shares are easy to buy and sell under normal market conditions.

Donna asks…

Why would you invest in gold?

I just don’t understand. It’s really only useful for specific industrial purposes. And now, it seems to be marketed to people that think the sh*t is going to hit the fan soon. If economic catastrophe happened, it seems like gold would be worth little. What would someone want with gold when they don’t know how their going pay their bills or feed their family. I doubt the demand for jewelry or electrical contacts would go up.

Wouldn’t more useful things like land, tools, home-based energy, etc.. be a better investment?

John answers:

In India, gold is most valued investment. People start investing in gold early so as to average the cost till important occasions like weddings, etc. So buying physical gold here is common & desired. ETFs are a new way of investing to avoid physical storage issues.

To me gold seems a good option due to its ever increasing value. Its also a good asset diversification. If u are looking to make quick buck then gold is not our ans. But from long term pt of view, it is giving avg 20% returns every year….

Out of ur list i guess buying land is the next best thing to gold… Both are ever increasing at least in India.

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