Gold is the most reliable and stable means to save and increase your capital. First of all, this is due to the instability of the foreign exchange market. At the moment, investing in gold is the most profitable investment that is available to almost everyone. There are a huge number of ways to invest in gold. For example, just buy gold in the form of a bullion..
Positive and negative aspects of this method of investment
One of the main advantages of a contribution to gold is its worldwide recognition. The economy develops on a cyclical basis, accordingly, in case of sharp recessions, a deposit in gold is one of the most reliable means to preserve capital.
Definitely, this type of investment has a negative side. This type of contribution is not a production type. Based on this, you will have to wait a little to make a profit. You will not get an instant capital increase. We will have to wait for gold to rise in price. This can take a certain amount of time, perhaps a year, or even a decade.
What are the methods to make a contribution to gold?
Of course, this kind of investment is based on the purchase of metal. You can do it in the following ways:
- Purchase of coins.
- Purchase of bullion.
- All kinds of jewelry made of gold.
- Buying futures
- Purchase of shares of gold producer companies
When it comes to buying coins or bullion, these transactions are made through the bank. Jewelry, however, can be purchased at any jewelry store. This option will bring you the least profit, since the jewelry is evaluated not only by the content of the precious metal in it, but also by the complexity of the decoration.
“Gold has always been considered a reliable means of saving money.”
OMS (State Insurance)
Gold is the most widely distributed instrument. When the price changes in the market, the trader will make a profit, or go to a loss.
One of the main disadvantages is the lack of a state insurance program. In different banks, the spread (the difference between buying and selling) may differ. It is set by the bank itself, and the difference from the Central Bank rate can be several percent.
Mutual Investment Gold Fund
The management company may give you the right to purchase a mutual fund. This means a contribution to a foreign fund on an exchange. The company is based on the price of the metal. You will pay a 5% commission for managing your investment. To reduce risks, money is not fully invested in a foreign company. This means that a certain amount must remain in your account. It is necessary to minimize the risks.
Purchase of gold
The most profitable alternative is to open a brokerage account. Thanks to it, you will have access to a huge number of tools with which you can invest in gold. For example, buy shares or enter into futures contracts.
Gold ETFs can be compared to mutual funds. In this case, the commission amount, both for the purchase and for the sale, is not more than 1%. High profitability is due to fewer costs.
A futures contract is a derivative financial instrument. Its price is rising due to the increase in the price of gold. It is concluded with the establishment of terms from 3 months to six months. After the expiration date, it is mandatory to sell it and, if desired, buy a new one. It is sold on the futures market of the exchange. Such operations are characterized by an imaginary amount of expenses. Such actions require the presence of a certain amount in the account as a guarantee.
Gold producer companies
Another significant way to make a profit with gold is to invest in a gold mining company. By purchasing shares in such companies, you automatically become part of a gold mining company. With this type of investment, you will receive a profit in the form of dividends.
The main priority of such a deposit is guaranteed profit, regardless of the price of the metal on the market. Even if the cost drops sharply, the company will simply reduce costs, and you will still continue to make your profit.