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Investing in Gold

Investing in Gold

Written by R. A. Stewart

Is Gold a good investment?

That is a question I cannot give you an answer to because it is a bit like a “How long is a piece of string?” question.

Whether investing in something is good or bad really depends on your personal circumstances and where this investment fits in with your objectives.

Is the money/investment needed in the short term, medium term, or long term?

Once you have answered this question you will have a better idea of whether gold is a suitable investment.

Problem with gold is…

That it does not provide investors with an income. All they can expect is capital gains; that is, selling gold at a higher price than when it was bought for.

The Share market provides a dividend to shareholders of the various companies and there is the opportunity to profit from the increasing value of the shares. 

Another problem with holding physical golds is the storage costs and this can mitigate any capital gains from selling it.

Different ways of investing in gold

There are several ways of investing in gold and there are pros and cons with each of them.

The easiest way of investing in gold is to purchase shares in a gold mine but this is very risky and should only be done with money you can fully afford to lose. Your country’s stock market may have listed companies of gold mines.

Purchasing gold coins is another way. You will find gold coins listed on ebay but the downfall of investing in gold in this way is that the seller will seek the highest price possible for their coins; and it may not reflect it’s true value.

Buying gold from a dealer is another way but this is beyond the means of a lot of people and then there is the problem of storage not to mention the risk of theft.

Collecting gold jewellery is another way of investing in gold. Just as collecting other items such as postage stamps, old comics, or barbie dolls, they give enjoyment to the collector and the items are worth something when it comes time to sell.

Investing in gold as an interest

Gold can provide an added interest to your portfolio. If you have discretionary money to spend then investing in gold can add an extra string to your financial bow and if the investment turns to custard then there is no damage done. After all, millions of dollars are lost in lotteries every year and no one blinks an eye lid. Giving up lotteries and use the money to build up your gold investments should be your best approach. 

The risk of investing in gold

There are risks with investing in Gold as there are with other types of investments but these risks can be managed. It is important for investors to do their research in order to understand these risks. 

Investing in gold should not be an alternative to contributing to your country’s retirement scheme.

The rules of investing

The rules of investing are just as applicable with gold as they are with other types of investments. Where does gold fit into your overall investment strategy? If you have some disposable spending money to invest then investing in gold is a good option. It will provide an added interest to you; that is interest in terms of enjoyment such as a stamp collector would derive interest from his or her hobby.

It is certainly not wise to just purchase gold with money which you can ill afford to lose or to invest your whole life savings into it. That is just asking for trouble. 

To summarise

Investing in gold can provide you with an interesting string to your financial portfolio, but it does have its pitfalls. It is important to weigh up the pros and cons and only invest money in gold which you can afford to lose. Read up on the subject and then decide whether gold is a suitable investment for you.

About this article

The opinions in this article are of the writer’s opinion and may not be applicable to your personal circumstances. You may use the content for your blog/site or ebook. Feel free to share the article on social media.

www.robertastewart.com

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7 New Year’s Resolutions which are Destined to Fail

  1. Lose weight

A New Year’s resolution to lose weight is destined to fail because it is vague and not specific. It does not say how you plan to lose weight and how much weight you are going to lose. A better goal will be “I am going to Give up going to fast food outlets” or “I am going to join the local running club.” If you are going to give something up then it may be an idea to have some alternative healthy options in mind. Focus on living an active and healthy lifestyle and the weight issue should take care of itself.

  1. Save Money

A New Year’s resolution to “save money” is just as vague as a goal to lose weight. There is no power to it. If you are just frittering away your discretionary spending money and have little or nothing to show from your labours then something has to change in order for your finances to change. You are better advised to decide on what you are saving for and take the steps needed to get there. Joining kiwisaver if you are not already enrolled has to be your number one priority. There are share market platforms such as Sharesies, Hatch, and Kernel Wealth which are set up to enable ordinary people to invest in the share market.

  1. Get Fit

A New Year’s resolution to “Get Fit,” is another one which is destined to fail because it is too vague and not specific enough. How you are going to get fit is not answered in a “Get Fit” resolution. If you have a “Get fit” resolution then what happens is that after a couple of days of running around the block or a few games of backyard cricket old habits will take over and your New Year’s resolution will become a distant memory.

  1. Learn to Swim

“Learn to swim” as a New Year’s resolution is not specific enough. It would be better to have a goal of, “To take lessons at the local pool once a week,” or to resolve to practice one new swimming skill every week. It is consistency which drives results. 

  1. Learn to Drive

Another example of a vague goal. It is better to have a New Year’s resolution of “I intend to sign up for driving lessons on New Year’s Day or whenever the Driving School is open for business after the holiday break.

  1. Get a Job

Deciding to “Get a Job” as your New Year’s resolution means that just taking any job which comes along will fulfil your goal. If that is what you want; that is fine but if you have something specific in mind then specify it otherwise you will end up with nothing. It is worth keeping in mind that many people will work at something they do not like until something more suitable comes along.

  1. Learn a new Language

This is another example of a goal which is not specific enough. There are dozens of languages you could learn so which one are you going to tackle? It will be better if you set a goal of “I will learn one new French/Chinese/Italian or whatever word per day. Such a goal is specific and tells you what you need to do in order to achieve your goal.

 

Your New Year’s resolution needs to be specific and have an action in it otherwise it will be just a wish. It is your desire which will enable your New Year’s resolutions to become the permanent change you are seeking. Just take one day at a time and see what happens.

www.robertastewart.com