Facts you should know before Investing in Gold

People, throughout the world are crazy to buy gold jewelry. Since the WGC (World Gold Council) promotes buying gold through the religious and social functions, gold is becoming extremely popular among people and investors alike. But before you invest in gold, you must know few things to make it the safest investment;

  • Jewelry, not as Investment: You can see that jewelry is the most popular and traditional form to buy gold but it is not safe as an investment. When you buy gold jewelry, a lot of gold is lost in making charges and wastage. The actual value of the bought gold in shape of special jewelry may come down by 30% to 35%.

  • Buying from Banks: If you buy gold in shape of coins from banks, don’t forget that the bank will charge least 10% of the value of the coin and also banks do not buy back these coins.
  • Bullion Bars: These bars are the best things to buy gold as they can be sold at higher rates whenever the price of gold rises. Bullion bars are good investment a common person can think of.
  • ETFs: These are the most popular way of investing in gold. In this system you do not buy gold but you invest in gold as you invest in shares. You only should have an investor account with a broker. This is the safest and most lucrative way of investing and the brokerage is also very less. The only disadvantage is that you do not hold gold in its physical form.
  • Irregular Income: Don’t buy gold thinking it can give you regular income. You can expect dividends if you buy gold ETFs and if you keep gold in its physical form, you can sell it but then you have to pay for the lockers as well.

  • Capital Increment: When you buy gold as an investment, it can prove good for hedging but it does not give that much return that investing in real estate can offer. Even buying shares can give better return as the inflation also affects the rates of gold when it comes to appreciation.
  • Easy to Liquidate: If you compare gold with other options, it is the easiest way to liquidate as an asset. You can convert gold into cash at any given time of the day. You can even take loan against gold from banks.

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