Gold Investing - Getting Started

With the recent instability in the stock market and in world affairs, you may be looking for the most stable investment solution you can get. Investing in gold may not be as exciting as holding an aggressive stock portfolio, but it offers a solid, reliable return in times of uncertainty. And, it couldn't be easier to get into.

There are three basic ways to get started in gold investing: coins, jewelry, and securities.

Coins

A good way to start investing in gold is to buy coins made of pure gold, and keep them in a safe place. The governments of the United States, South Africa, Canada and many other countries issue coins containing a specified quantity of gold, such as 1/4 ounce or 1 ounce. These coins do have a "face value", such as $10 or $20, so they are considered legal tender. However, the value of the gold content is usually far greater than the face value, so these coins are essentially the same as bullion bars.

Jewelry

Since you may already own some gold jewelry, you may have already started investing in gold. A big advantage of gold jewelry is that you're able to enjoy the beauty of the piece while you are using it as an investment. Buying 24 karat gold is generally the best way to invest, but 14 karat gold jewelry works just fine as long as you are sure of the gold content and the weight. Any reputable dealer will be able to provide you with the content of gold by weight, and thus the investment value of the piece.

Securities

There are also ways to invest in gold without physically possessing the gold. These include securities such as mutual funds and ETFs.

A mutual fund is an organization of investors who contribute money to a fund that is professionally managed. Each investor can buy as many shares of the fund as he or she likes, so owning shares in a mutual fund is similar to owning shares of stock. In a gold mutual fund, the money is invested in gold bullion or futures, rather than business stocks. One example of this kind of fund is the BullionFund.com.

An ETF (Exchange Traded Fund) is a bit different- these allow you to buy shares that directly represent a quantity of bullion that is stored in a secure location and insured. There is no pooling of assets involved. Examples of ETFs include the iShares COMEX Gold Trust in the US, and the ZKB Gold ETF in Switzerland.

About the Author

Tom Webster is a researcher and copywriter who writes for several jewelry blogs, including Buying Gold Jewelry.