How to Buy and Invest in Gold

So, you’re thinking of investing in Gold?

The first question to answer is just how much should you have?

The traditional answer has been 5% or so of your personal net worth. However, the true answer is that it all depends on the nature of the rest of your portfolio. If this contains investments in natural resources (which will also increase in nominal value as the intrinsic value of money declines), 5% may be sufficient.

Marc Faber, editor of the Doom, Boom and Gloom Report, who is also an extremely knowledgeable and astute investor, suggests that 20% in gold bullion related investments is more appropriate, if the rest of your portfolio consists of paper assets only.

Then you need to determine the form of Gold you wish to purchase for there are many. And each form or method comes with it’s own pros and cons.

However first and foremost we would highly recommend that you have a percentage of your portfolio in physical bullion in the form of gold bars and gold coins as absolute insurance.

Bullion Coins and bars

Pros

  • Buying gold bullion is the safest way to gain a foothold in the gold market as a form of investment.
  • Owning a bar of gold ensures that there is no counter party risk
  • It is owned by you and is not connected to the banking system
  • There is always a lot of satisfaction from physically holding your own gold.
  • The gold price will never go to zero, unlike the possibility of fiat currencies and other forms of investments
  • The 5 attributes of owning physical gold are:
  1. portable
  2. divisible
  3. durable
  4. generally accepted worldwide
  5. an ounce of gold is an ounce of gold anywhere

Cons

  • You have to take possession of it and therefore risk losing it or having the bar stolen.
  • Other options are to have it stored for you in a vault, but this carries costs of storage, security, and insurance.
  • Buying physical gold carries a price premium. This ranges from 3% to 15% above the spot price, depending on the quantities you buy.
  • Gold bars may need to be tested for gold content (assayed) if held privately to ensure that they do indeed have their stated gold content, before being resold and this is an additional cost.

Our experience

So as we’ve already mentioned when considering how to buy gold from the many gold investment options, we first highly recommend that you have a percentage of your portfolio in actual physical gold bullion. These gold bars and gold coins are your absolute insurance against government recklessness. Always check what percentage over spot price you are paying, aiming for 6% or less.

However, investment demand for gold bullion is up massively (248% in Q1 2009 from Q1 2008) so you may now struggle to find premiums as low as this.

To learn how to buy and invest in gold using 8 other specific methods, along with their individual pros and cons then get access to our free eCourse now. NOTE: While we may live in New Zealand, the methods we discuss about how to buy gold within the eCourse are available to virtually anyone regardless of where you live in the world.

You can also view a full list of all our articles at the SITEMAP

P.S. And if you’re ready to buy gold now, we have negotiated a deal from a local Auckland, New Zealand gold supplier, where you can buy gold bullion for only 3%* above spot price and as low as 2.5%* for larger orders (*plus ingot charge). For more information go to… Buy Gold in NZ

P.P.S. Or if silver is what you’re after, we also have a deal with an Auckland, NZ silver refiner and supplier, so you can buy silver bullion for only 10% above the silver spot price. To learn more go to… Buy Silver in NZ

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“Why and how to invest in Gold”