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This guide to investing addresses questions and concerns that investors who are new to precious metals might have about investing in monthly installments. They may be wary of hidden fees and charges or unsure how monthly installment investing can help them. Investors who choose to buy gold in monthly installments can exploit the benefits of precious metals investment plans while avoiding pitfalls.
Investing in Gold
Gold is a popular investment vehicle as an inflation hedge, as a means of portfolio differentiation, and as preparation for economic instability. Its inherent, enduring value gives investors a sense of security that stocks and bonds cannot match. The decision to invest in gold reflects a conservative but forward-thinking investment approach.
One way to enhance the performance of gold investments is to schedule and coordinate investments. An installment plan allows investors to structure their purchases of gold, simplifying the process and potentially increasing the rate of return.
This guide provides a step-by-step introduction to gold investment in installments. It will help you incorporate gold investment into your portfolio, decide what type of gold and precious metal investments to make, and develop a profitable relationship with a gold investment company you can trust.
Why Buy Gold in Installments?
There are several reasons to buy gold in installments, and each has the potential to make investing easier and more profitable.
Dollar-cost averaging is one of the principles of investing in any volatile investment vehicle. Many investors adopt a “buy on the dips strategy” of investing when the purchase price is lower. However, it is often difficult to determine exactly when a dip will occur. Many investors lose money by attempting to buy on the dips but do the opposite, buying investments that seem to be doing well and selling investments in a panic when they seem to be losing value.
Dollar-cost averaging is a strategy of investing in a certain dollar amount in a fund at regular intervals, such as once per month. Because the dollar amount is the same every month, the investor will buy more shares (at a lower price) when the investment is doing poorly and buy fewer shares (at a higher price) when the investment gains value. This means that the average share price for the investor’s purchases will be lower than the average share price for the year. Dollar-cost averaging allows investors to increase their rate of return without having specialized knowledge of the investment itself.
Take the Guesswork out of Investing
Many investors struggle to decide how and when to invest. They can spend a great deal of time trying to outguess the markets. For investors with less experience or investors managing a large and diversified portfolio, this can lead to paralysis or panic buying and selling that can reduce the portfolio’s performance.
Buying in monthly installments makes the investment process easy. Investors don’t have to worry about how to balance their portfolios. They can confidently implement a sound investment strategy without having to take their attention away from other aspects of their lives.
Investment funds often allow investors to set up automatic withdrawals from a checking account or automatic payments on a credit card. The benefit of automatic investment is that it encourages you to “pay yourself first.” Investors who write a check or wire every month to invest often forget or choose not to invest to cover other expenses.
Subscription-based services offer monthly plans. These plans can be convenient but beware of premiums and added fees that diminish the value of your investment. Be sure that you understand the fee structure of any investment vehicle before you buy gold in monthly installments. The fees should be low enough that they do not outweigh the benefits.
Types of Investments
Investors can take advantage of gold through many different investment vehicles. The decision of how and when to invest in various types of gold funds depends on the role these investments play in your overall investment portfolio.
Investing in Physical Gold
Physical gold, such as gold bars and gold coins, requires shipment and storage in a highly secure facility, which entails some overhead costs. When considering an investment in physical gold, consider whether there is a cost per transaction to cover acquisition and shipping costs. A single larger transaction may be more economical than buying on installments depending on the price structure.
Gold stocks include stocks in gold mining companies and other companies involved in the processing or storage of gold. Investing in gold stocks is typically easy, but there may be commissions or fees from the brokerage on your trades. If a fund you are investing in charges fees per trade, it might be more cost-effective to buy larger quantities of stock in less frequent trades, even if it reduces the ability to employ dollar-cost averaging.
Exchange-traded funds rise and fall with the price of physical gold on market exchanges. They have the advantage of lower overhead as the investor does not have to buy and store physical gold. However, it does not have the permanence and security of buying a physical precious metal and knowing that they can inspect it at any time.
Self-Directed Individual Retirement Account
A Self-Directed Individual Retirement Account (SDIRA) is a type of IRA that gives investors more freedom to invest in different types of assets beyond the typical stocks and bonds. SDIRA holders can invest in precious metals. Some trades and financial transactions are prohibited with SDIRAs, so consult a tax attorney or call 833-600-GOLD for advice on setting up a precious metals IRA.
The Buying Process
The specific process of buying gold differs from one company to another. It is important to consider the details of any purchase plans before investing any money.
Rollover into an IRA
Investors who have an individual retirement account can typically roll over their holdings into precious metals as part of a self-directed IRA. The process involves either directly transferring funds into a new IRA or selling shares in the old IRA and reinvesting the funds into the SDIRA within a specific time.
Premiums, Fees, and Load
Buying precious metals or shares in any investment fund often involves paying additional fees or charges. When buying precious metals, these might take the form of premiums or subscription fees. When purchasing shares in funds, investors often may charge a percentage of the share price, also called a “load.”
When comparing funds, consider any fees or costs associated with initiating an investment. Any money you pay for fund management and transactions will cut into the return on the investment. If the investment fails to increase in value, the money spent on costs and fees will be a loss.
Shipping and Storage Fees
For investment in physical metal, there are fees for shipping of gold to the storage facility and storage in a secure storage facility, and some funds charge fees to cover these costs. Be mindful of these costs when evaluating investment opportunities.
Investors can buy physical gold or gold funds by wire transfer, check, money order, and credit card. Keep in mind that the pricing might be different for each payment method. Banks might charge fees for wire transfers, and investment companies might place a surcharge on credit purchases. Payment by personal check might take longer than other methods, which might complicate a “buy on the dips” strategy but should not appreciably affect a dollar-cost averaging strategy.
One of the quickest methods of bringing new funds into an IRA is a direct transfer from your old IRA. Direct transfers save you time and any costs incurred by withdrawing your funds from your old account and then wiring them to your precious metals account.
Buying in Installments from The Oxford Gold Group
The Oxford Gold Group makes it easy to buy gold and other precious metals in convenient monthly installments. They will work with you to create an automated investment plan. If you are rolling over funds from an existing plan, The Oxford Gold Group will contact the financial institution that holds your current IRA to facilitate the rollover.
Funds managed by The Oxford Gold Group incur annual fees but do not charge for individual transactions, making it easy to buy gold in monthly installments. The Oxford Gold Group will work with you to handle the paperwork.
For more information on investing in precious metals, The Oxford Gold Group has an investment guide to educate customers on buying gold and other precious metals.
Contact the Oxford Gold Group to Open an Account
You can send a message to the Oxford Gold Group using the contact form on the website or call 833-600-GOLD during business hours. Our office is located at 9100 Wilshire Blvd., Suite 800E Beverly Hills, CA 90212. Reach out to us today to discuss your plans to buy gold in monthly installments or if you have any other questions about precious metal investments.