Investing in gold: a golden opportunity

Gold and property are the best forms of investment, if you can afford them! Investing in gold is a great option, provided you know what you are heading for and can realize the potential benefits. Here are some tips on how to get started.

Gold funds
It’s always a good bet to get an expert who can guide you through these relatively new funds if you are a serious investor. As with mutual funds, you can place your money on the precious metal in the stock market through gold funds too. And if you thought this was just another stock, you will be pleasantly surprised to find your money converted to gold if you strike it rich in the game. Generally speaking, a single unit of the gold fund equates nearly one gram of pure gold.

So how do you go about it?
Generally, gold funds attract money from investors, and this is used to purchase physical gold bars. The total amount collected is divided into chunks. A large part of the money is used to purchase gold and the rest is used for other products like gold bonds, etc. A slight deviation from mutual funds is that this money is not used to invest in regular equities. A large chunk of money is invested in gold, and the overall performance would vary according to the variation in gold prices. This would mean that you need to scrutinize deviations in gold prices to gain the maximum profit from the investment. The Net Asset Value (NAV) reflects the performance of your fund and if this is on the higher side, you might get a chance to make new investments even after the initial offer is closed.

What does it hold for you?
To date gold has always been sold in the form of gold coins or jewelry. And there is only so much that you can possibly store of the metal physically, as you cannot go beyond a certain amount, and in the event of a price difference on the higher side, you won’t be able to take complete advantage of the situation. Gold funds come to your rescue in such a case. All you need to do is buy some units of a gold fund to begin with and these units can be easily credited to your demat account. Of course, it’s better to invest only a certain percentage of your savings and not all of it in gold, so that you have enough to fall back upon in case of need, besides property.

Tax implications
Gold funds, although similar to mutual funds in many ways, are yet to be completely at par with equity schemes. You don’t enjoy as much tax-free treatment, but you can liquidate these at any time you want. And an immediate benefit is that, unlike general stocks, you can be sure of stable gold prices and definite seasons where you can get the maximum profit.

Minting Gold!

Making purchases in gold has always seen raised eyebrows and hushed discussions. In some countries there is a tendency to judge a person by the amount of gold he or she has amassed in life, making such countries the largest gold consumers amongst the nations across the globe. Gold is a secure investment for most people because it retains its intrinsic value. Gold coins are a convenient way of investing in gold.

Gold coins are known to be the easiest means to accumulate gold. Purchasing gold in the form of coins is a sensible option of investing in the precious metal. Buying gold coins is a good option as compared to choosing intricate jewelry designs that reduce the value of the gold you buy. With buying jewelry there are monetary losses in the charges the jeweler bills you for making the jewels, in addition to the gold that is lost in the crafting of the jewelry as well.

If you are looking at buying gold coins, here are some of the basic rules you need to abide by.

Determine your budget and quantity.
Most often one tends to go overboard with budgets. Treat this purchase like any other purchase and you’ll find it easier to adhere to the price range.

Don’t simply splurge.
Do a little research about what is available in the market, before going ahead with your plans.

Ensure authenticity.
Ensure that the gold coin that you buy is from a reputable dealer and is certified.

Purchase coins over pieces of jewellery.
Instead of purchasing jewellery, it would be better to invest in coins or gold bars or biscuits. Purchasing a piece of jewellery may leave you bewildered about the value for money as you choose from a variety of designs. You generally cannot go wrong with a gold coin.

Once you’ve bought the gold coin, insist on a receipt and ensure that you get the certificate. Today, large numbers of people find it convenient to invest in gold coins as they are an easy option. It is safer to purchase your coins from banks or from brands that give you the authenticity certificate, as they provide you a guarantee of 99.9% purity, although their prices may be higher than the gold prices in the market; but then authenticity always comes with a price tag!

Advantages
When you buy gold coins, make sure that they are bought from gold mints, dealers, shops and eBay. Once you’ve bought gold in the retail segment, you can also buy it in the wholesale market. The advantages are that coins can be bought easily, stored and transported. Besides, you can sell them wherever you choose to. Gold coins are generally easier to sell than gold bars. Gold coins are just the thing if you enjoy collecting them or if you travel a lot – when you might use them for easy conversion as you need!

The best thing about gold coins is that you can buy them with a much smaller investment than what is needed to buy gold bars.

Gold coins also make great gifts because the gold has intrinsic value and your gift will grow in worth as time goes by. Since they come in different denominations you can conveniently choose your budget for a gift.