If you have been investing in the stock market the past few years, I can readily understand why you are looking to invest in gold and other precious metals. While the stock market has taken a dive (although recovered a good bit since 2009) the precious metals market, and in particular gold, have been soaring. The good news is, it has only begun to boom! Many are forecasting a further rise in gold and silver prices in the near future, so there is plenty of time to get in on the action.
So what do you need to know to make money in the gold trading market? Not so fast, let's go over a few basics right away. First of all, I would never tell anyone to put 100% of their money in anything, even gold or other precious metals. No one that I know of can predict the future, so it is always good advice to diversify your portfolio. Where have you heard that before? From every stock broker worth his salt, probably. So with that said, realize now that only a part of your total portfolio should be in gold, how much is up to you. How much can you risk? How quickly do you need to get the money back in a crisis? There are many more questions that I hope to answer here.
The allure of gold has been with us since at least Egyptian times, and probably before that. It's shiny, beautiful, valuable, and holds it's value better than most things. But gold has had it's up's and down's over the years, to be sure. Why is it going up right now? There are several reasons, one of the main things is they aren't making more of it. Gold has to be mined, and the vast majority of it has already been found. Of course some major gold mines are still operating and producing tons of new gold every year, but a finite product that is in high demand will always retain it's value. Another reason it is going up in value right now is that some very large countries seem to be buying a lot of it, namely China. China is one of the richest countries in the world besides the U.S. right now, and they are buying obscene amounts of gold and stockpiling it. Are they investing in it? Or is it a safeguard against massive inflation they see coming down the road? That is up for speculation, but either way they now own more gold than all but 6 other countries. Of course the U.S. is still numero uno, but that could change in the future.
Making money in the gold trade can be done in several ways, you don't have to buy the stuff and worry about where to store it. Unless of course, you really want to! Buying gold bars isn't really recommended, but hey, it's your money. And your back if you want to carry that stuff around. I would find another way to cash in, frankly. Especially since there are many other methods that don't entail any physical labor. Here are a few:
1) Buying gold bars - Instead of owning a paper asset, you can actually go buy gold bullion and either keep it at your house or a certified storage facility.
2) Of course another option is to buy gold coins, which are an indirect investment in gold since the coin itself has value depending on it's interest from collectors.
3) Gold mining stocks - You could always buy stock in a company that mines gold, with the idea that if gold is going up in value then a well-run mining company would also have a rising stock price. The best mining companies already have been in business for many years, and have a profit built in. Some newer companies are speculative however, and owning their stock would also be considered speculative.
4) Investing in mutual fund and ETF's - In order to spread out your risk and even manage it better you could purchase shares in a mutual fund that invests in gold assets. Certainly there are many to choose from and some are quite profitable. An ETF is just like a mutual fund, only it can be traded like a stock
5) Futures - Futures, or futures contracts, are paper assets that can be purchased from a futures exchange. A futures contract is nothing more than a promise to obtain a commodity at a standardized quantity and delivered at a specified date in the future.
Well there are the basics of what you can do with gold investing, as always learn as much as you can before investing in anything and know your risk, as well as your rewards.
Are you tired of losing money in the stock market? Or do you just want to learn how to diversify your investments by adding gold or precious metals to the mix? Learn more by visiting us at online gold trading website.
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