How Gold Buyers Make Huge Profits

Have you ever wondered whether buying gold is truly as lucrative as people say it is? If so, how lucrative can it be? Well, you just need to analyze the trend in gold’s increasing value to understand this.

An Example Of A Profitable Investment In Gold

If you had invested in gold 12 years ago, you would have made $1,000 dollars for every ounce by this year (the U.S. National Mining Association records indicate that gold was worth $309.73 in 2002, which gradually increased, year by year to a high of $1,335 per ounce in March 2014, based on data from the Australian Mines Atlas). This means that you would have a 300% profit on the original price. So, if you had invested $20,000 in gold back then, you would now be staring at a profit of approximately $64,000.

How You Should Invest In Gold

Although gold can be highly lucrative, it’s never a wise decision to put all your investment in just one asset. This is especially so because the benefits of gold investment would normally be achieved in the long term. Therefore, you should diversify your investment portfolio to include other assets that provide short term gains.

True diversification will involve investments in rental real estate, foreign currencies, stocks, bonds, as well as precious metals. Since the value of gold is less volatile than such asset classes as equity and debt, it can act as a hedge against inflation within your investment portfolio. It’s definitely a wise investment to consider, regardless of your risk profile or age.

Important Aspects To Consider

There exist several key factors that you must consider before making your investment:

(I) Buying Bullion: Bullion contains 99% of the pure metal; hence its price is based on the actual market value of gold. You’ll need to have a considerable investment in order to buy bullion.

(ii) Buying Coins: Buying coins is much easier and requires lower investment to purchase, compared to bullion. Government backed mints issue such coins, which are composed of the pure metal.

(iii) Buying Rare Coins: Rare coins possess a double value of being made of a precious metal and being rare. The value of such coins is significantly higher than that of bullion due to their rarity.

(iv) Short Term Price Declines: It’s important to remember that prices can experience small fluctuations during short term periods. This is a normal occurrence that happens even as the overall price increases in the long term.

(v) Buying Through Mutual Funds: If you don’t intend to have a hands-on approach to investment, you can opt to invest in precious metals through mutual funds. Such mutual funds allocate portions of their fund’s investments to precious metals.

(vi) Get Insurance: You should always secure your investment by getting it insured.

(vii) Storage: Whenever you buy bullion or coins, you must also have an appropriate storage facility. An offsite storage facility may be a safe and convenient option. Alternatively, you may opt to have your own safe deposit box. Remember to consider such storage and insurance costs when making your investment.

Source by Abraham Barakat

How Gold Buyers Make Huge Profits