Investing in gold is one of the safes ways of diversifying your portfolio because it provides the security of a stable and reliable commodity. This ensures that gold’s exclusive status continues to be upheld and that its intrinsic value enjoys ongoing price rallies over time. Investing in gold offers protection against the devaluation of a portfolio as its very generally increases when other markets fall, gold is actually considered an “anchoring” investment as it secures your investments during challenging times. The price of gold in not subject to the same market forces that affect stocks and other financial assets and therefore gold serves to leave or even minimize investment risk.
Exchange-traded funds (ETFs) Financial products physically backed with allocated gold bullion, listed on a stock exchange, and bought and sold in the form of shares.
5 ways of investing in gold:
Kruger Rands: Kruger Rands are the most popular coins available. They make good investment prospects compared to other gold coins because they only carry a small premium over the value of their gold content. Therefore this makes them a better option than collector coins which are valued on aspects like rarity and condition and tend to sell at a higher premium to the gold price.
Investing in new gold: You can buy the new gold ETF in the same way as any other share listed on the JSE via your stockbroker. New gold gains you 100% ownership of gold bars but without you physically having the gold. The gold bars are highly liquid and accessible to investors. Their share price includes the trading and holding costs.
Buy Gold Shares: This is a good way of investing in gold as there is a commodity rich exchange, there are many to choose from , you can select one of the largest well known miners who might also pay a dividend. If you are looking for high return you can also gamble with one of the smaller gold miners.
Invest in South African Gold Fund: If you don’t want to physically buy gold and can’t decide which gold miner is best suited for you, a gold fund can suit you better. These funds hold portfolios of shares in gold miners and related companies. There is a wide range available for you to invest in and you can find one to suit your investor profile.
Trading Gold Futures: This involves high risk. Because this is a geared product, it’s a high risk product. But if you enjoy a bit of short-term speculation on the gold price, this could be right up your alley. The commodities themselves trade on exchanges outside of South Africa, but you can trade them on trading platforms.
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