Owning Physical Gold As An Investment

Owning Physical Gold As An Investment

Owning physical gold as an investment is a sure hedge against inflation, deflation, recession and other undesirable economic conditions. Prices of gold do not have wild fluctuation, as is the case with stocks, ETFs and currencies. Gold holds it purchasing power. It has done so for the past 33 years. Therefore, physical gold ownership is a smart move.

Best preserve of value- physical gold

Physical gold ownership preserves value and wealth in the best manner possible. It offers a financial safety net that will endure the test of time. Stock markets have crashed and currency devaluation is a reality in the world. However, rarely will the price of gold take a beating. In fact, it is always on an upward trend according to market statistics.

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Storage

Those thinking about physical gold for retirement have many options to consider ranging from gold bars to gold coins. Gold storage is a challenge that will confront an investor. One can decide to opt for the storage facility of a bank or any other established commercial entity. It is possible to find affordable storage.

Safety is an issue of paramount importance when it comes to owning physical gold as an investment. It is advisable to find the best storage option that will offer value for money. Many options will confront an investor. One should read reviews so that to know the history of a storage facility.

Gold coins as an option

Physical gold for retirement can be in the form of gold coins ranging from American eagle to Chinese Panda. One should avoid expensive coins known for their antique value. Such coins are numismatic coins and there are more of collectibles than an investment.

The investor who wants to track the price of gold or to have a store of wealth should deal with non-numismatic coins. These offer cheapest premium over gold spot price. The best gold coins in the planet for investors include Britannia, Sovereign and South African Krugerrand. These coins usually earn profits when sold. The trick is to buy low and sell high just as is the case in financial and commodity markets. In most cases, selling of gold coins is exempt from capital gains tax.

Where to Buy Physical Gold

For those thinking about owning physical gold as an investment the starting point will be purchasing gold bars and coins. A number of outlets deal with these items.  Government mints do not only deal with production issues. They also have sales departments. Commercial entities such as jewelers and precious metal dealers also sell gold. When purchasing, a person will be required to pay full price before assuming ownership of the gold in question.

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Authenticity tests

When it comes to physical gold ownership, it is very important to verify authenticity of precious metal before paying price.  When dealing with a non-government entity such as a jeweler, there will be, need to verify whether a product is genuine. Visual inspection will come in handy. Real gold has certain characteristics. Things to look out for include official markings and signs of discoloration. If there is noticeable discoloration this is a sign that the product is not gold but something that is gold plated.

Visual tests are not enough when it comes to purchasing physical gold for retirement.  The eyes have serious limitations. On the other hand, one can rely on the tests performed by a certified gold tester.

Diversifying portfolio with gold

The basic investment common sense is that having all eggs in one basket is the worst investment decision anyone can ever make. A portfolio biased towards non-tangible assets such as stocks and ETFs will need a mix of physical assets such as gold, silver and other precious metals. There is need, to strike a fine balance between the tangibles and the non-tangibles if the desire is to have a well shielded portfolio.

Peace of Mind during Retirement

Those who want peace of mind during retirement are better with physical gold for retirement. Most financial instruments are very volatile; they gain and lose value very quickly. They are good for speculators who want to make massive short-term gains. However, for someone with a long-term view in mind, a portfolio having physical gold, stocks and real estate is required. Having a significant percentage of an investment portfolio as fixed assets and precious metals will help to counter any negative fluctuations caused by current assets in a portfolio. Because such a portfolio also has stocks and other instruments, it will also be possible to gain from positive stock market trends. A portfolio that is a 100% stocks and cash in bank has dangerous exposure to risks.

The fact that gold is a fall back currency for US government and other government across the world justifies the reason of owning physical gold as an investment. In case of total economic or political collapse, the medium of exchange is very likely to be precious metals including gold. Governments have huge reserves of Gold.

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