Connect with us

The 3 Important Steps to Becoming a Gold Investor



Before you become a bullion investor, you will have to make some important decisions. You have to decide how much of your portfolio you want committed to bullion, whether you’d prefer to own physical bullion or invest indirectly, and what kind of physical bullion products best fit your goals and needs.

When you buy gold and silver bullion, you’re buying a degree of security and confidence in your wealth’s staying power. Some of the wealthiest investors in the world use gold as a safe store of value and a way to protect their fortunes from uncertainty in the world and global markets.

The right allocation of gold can give you those same benefits. Before you dive into the market, you’ll have to make a few important decisions.

1. Physical Bullion vs. Paper Assets

There are several ways you can get into the bullion market to begin with, but you have to make one basic choice. Do you want to purchase gold coins and bars in their physical form, or would you rather invest in gold on paper without dealing with the physical product?

There are benefits to both. When you invest directly in gold bullion, you gain direct ownership and control over an intrinsically valuable commodity. You can insure your holdings against risks such as theft or fire, and once you have that protection, you don’t have to worry about a thing. It’s one of the most effective ways to take counter-party risk out of commodity investing.

If you don’t have to worry about insurance and storage, there are other ways to include gold in your portfolio, such as Exchange-Traded Funds. A gold ETF allows you to buy shares of a fund that itself owns gold and futures contracts. This way, you get exposure to the commodity without having to handle the physical product itself.

2. Find the Right Bullion Products

If you do decide that physical bullion is the way to go, you then need to choose which products work best. There are several options, each with its own pros and cons:

  • Gold coins are high-purity bullion products made by mints around the world. Coins like the Canadian Gold Maple Leaf and American Gold Eagle are among the most recognized and easy to sell.
  • Gold bars are made by private refiners and may come with lower premiums than other coins. Valcambi and PAMP Suisse are among the most recognized products.
  • Gold rounds look like coins but are also made by private refiners. They often come with unique designs, but it is worth comparing prices with similarly-sized products.
  • All of the above options can also be found in silver, which may be a more budget-friendly option for those new to bullion investing.

Untitled design (11)

3. Decide How Much to Invest

Finally, decide how much of your portfolio you want to commit to bullion. Bullion is one asset among many in a balanced portfolio. Determine how much you have available to spend on bullion for the first time, as well as your final allocation goal.

This can help you calculate how much you need to allocate toward bullion buying when making your investments. You can purchase bullion all at once or slowly increase your position over months.

Investing in bullion is a great way to diversify your investments and add a defensive position to your holdings.

Continue Reading