Other Gold Investment Options
If you’re wondering how to invest in gold, there are many different options available. At FirstGold™, we believe gold is money. Here we explain a few of the most popular investment options.
Digging for treasure
When educating investors on how to invest in gold, traders talk about gold stocks or gold companies. They are referring to public companies that are actively producing gold or supplying property, plants, and equipment to gold miners. The fundamentals of these companies look like the fundamentals of other public companies, and they can be analysed against one another to determine relative performance just like you would approach an investment in any other industry group. For investors that have a high tolerance for risk and an adequate capital balance, gold stocks may be worth the effort as they can outperform both gold prices and gold ETFs when the market is booming. On the flip side, buying shares in a company rather than the metal itself exposes you to operating risk and the possibility that management blunders, poor acquisitions, mining crises and a number of other potential troubles will cause a company’s share prices to decline even while gold itself is on the rise.
At FirstGold™, our savings plans are structured so that you have no exposure to the operating risks inherent in gold stocks.
FirstGold™ is purely the custodian of your gold and silver, while the title to your savings belongs to you – no matter what.
Exchange-Traded Funds (ETFs)
Exchange-traded gold funds are very similar to mutual funds, where a pool of money from many investors such as yourself is amalgamated, and then managed by an investment firm on your behalf. Unlike a mutual fund however, ETFs are not actively managed portfolios but fixed baskets of securities that can be traded like a stock. ETFs are convenient, liquid, and efficient, but they aren’t free – management and brokerage fees can be significant. Also, with ETFs you never actually own physical gold; there is always the question of whether the ETF is actually backed by physical gold, as many ETFs simply use complex derivatives to track the gold price.
FirstGold™’s savings plans puts your savings back into your hands – learn more about the advantages of FirstGold™ and how to invest in gold with FirstGold™ today.
The oldest currency
Gold coins are a popular way to get started once you know how to invest in gold for long-term investors, because gold coins can be fairly uniform and easy to acquire. This is not the most common way to invest in physical gold (bullion bars are more popular by volume), but new investors often start with gold coins because they are heavily marketed, and because they may not know the difference
between the intrinsic (gold) value and extrinsic (numismatic) value of collectible coins. In addition to the value of the metal they contain, numismatic coins have added value as beautiful, old, or precious items. In reality, however, the majority of the gold coins available are not rare. Investors should hope to pay very little above the value of the coin’s gold content, although suppliers of gold coins are reluctant to sell gold coins for their gold value and often charge a premium for the “collectable” value of the gold coins.
Knowing how to invest in gold with FirstGold™, which has no storage or insurance fees, makes it the most affordable and secure way to invest in gold.
Options & Futures
Crystal Ball Bets
Trading gold futures means you can invest in gold on credit to leverage your gold investment. However, investing in gold this way puts you at risk of big losses if the gold price moves in a direction opposite to what you anticipated.
For the more experienced investors, gold options also let you speculate on which direction the prices will move, but the gold options market is much more intricate, and it is recommended that you have a well-built knowledge and skill-set of the subject before attempting to invest in gold with options. You should always understand the risks before investing your hard earned money.
At FirstGold™, we keep it simple – learn more about how to save in gold with us today.
Gold certificates and unallocated gold
‘Fractional reserve gold’
Gold certificates represent ownership of unallocated gold with an option to convert your ownership into allocated gold if you wish. ‘Unallocated’ gold enables you to buy interest in a pool of gold rather than owning specific bars. The institution keeps a record that you have bought a particular amount of gold, but only keeps a certain fraction of the physical gold on hand to cover potential customer withdrawals. This may save you storage and holding costs, but if the financial institution experiences financial difficulty or becomes insolvent, you could risk losing everything. Despite gold certificates referring to unallocated gold with the right to be converted into allocated gold, it should be mentioned that the process of conversion as well as the ensuing storage costs of allocated gold may be very expensive. Given this, the conversion is rarely made unless it becomes known that the supplier is experiencing financial difficulty, by which time it may be too late!
At FirstGold™, your gold and silver is held in an allocated, segregated storage account and owned by you – it is not on FirstGold™’s balance sheet, nor can it be accessed without your consent for any reason. Your real savings are truly in your hands.