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Gold is a rare investment that experts view as relatively safe compared to other resources and stocks in the volatile world of investing. Even today, amid uncertain times brought on by a global pandemic, gold prices are surging as the metal remains in high demand.
At a surface-level glance, the rising price of gold investments might suggest that a fall is coming as the world slowly shifts back into a state of normalcy. However, there are many reasons to believe that the high value of gold might stay put. Not only that but there is also evidence that gold’s value might balloon within the year and become a prized, high-return investment.
Keep reading for reasons to invest in gold sooner rather than later. In addition, there are methods of buying and investment tips you can follow to make your gold purchase as safe as possible.
Why You Shouldn’t Wait to Invest in Gold
Although buyers view the precious metal as a safe and steady investment, there are a handful of reasons why you shouldn’t wait to invest in gold.
Gold is in High Demand
In March 2020, investors traded gold prices at their highest level since 2013. And while gold’s value and demand have since dropped slightly since those historic highs, it is still a highly sought-after commodity.
A large part of that influx in demand was due to the fluctuation of the United States stock market at the time. Because stocks were more volatile than usual, concerns about the economy began to rise, and investors rushed to find a way to ensure their financial well-being. For many, the solution was gold, a resource that has remained consistently high value for centuries.
There is still plenty of economic and stock market uncertainty today, and the demand for gold has remained high as a result. In fact, buyers are so intent on securing a gold investment that the supply for this precious metal has plummeted to the point that many investors are forced to wait nearly two months before getting their gold coins or bullion.
There are two main reasons why you shouldn’t wait to invest in gold because of this demand. First, secure your place in line for what is currently one of the most competitive, resource-deprived gold markets in the modern era. And second, financially protect yourself against the volatility of the stock market with a steady resource during a years-long increase in popularity.
Gold is a Traditionally Steady Investment
Gold is one of the steadiest investments a person can make, historically speaking. While the specific value of the precious metal changes depending on the world’s financial circumstances, just like any investment, it typically remains a high-value commodity at its lowest points.
What that means for potential investors is that even if gold’s value does revert below where it was before its boom in 2020, it will still likely be a low-risk purchase. Since the demand for gold is currently much higher than average, investing now to capitalize could net a high return with minimal risk after the market stabilizes.
Returning to Normalcy Could Shift Gold’s Value
Gold will likely remain a sound investment even after the supply increases and the stock markets settle. So if you purchase gold before all essential factors revert to average, you will most likely be making a good investment.
On the other hand, missing the wave of gold investors by waiting to purchase could result in you also missing the highs that are unlikely to repeat any time soon. Eventually, the demand for gold will dwindle slightly, and its potential to be an extremely lucrative investment along with it.
Choosing to invest in gold now, while the demand for the precious metal remains high, can yield a return that you might not get once that market stabilizes.
Where You Can Invest in Gold
One of the beneficial aspects of investing in gold is that there are many different ways to invest. For example, investors can place their money into physical gold products or go through the stock market and place funds into a company that deals in gold.
While these different investment sources have varying pros and cons, they are all secure ways to get involved in the gold market.
Gold Mine Stocks
The stock market is one of the best ways for buyers to start investing in gold without acquiring physical gold. Since the demand for gold is high, this could save you anywhere from one to two months waiting for your precious metals to be delivered.
A few different industries handle gold and deal on the stock market, but gold mining companies are one of the most popular among gold investors. Since mining companies harvest gold and other resources, the demand for their precious metals is the primary force dictating their stock value.
However, there are downsides to investing solely in gold mines. The most significant drawback is that gold’s demand doesn’t solely dictate mines’ market value. Something unrelated to the cost of precious metals, like new ownership or a public scandal, could drop your stock’s value even if the gold boom continues.
Gold Bullion Traders
Gold bullion, the large, solid gold bars often depicted in movies, are another common way investors get involved in gold. And the easiest way to acquire bullion is through gold bullion traders. Bullion traders are experts in everything related to gold. They can offer you insight on gold storage, transport, and the best times to buy.
Investing in gold through a bullion trader requires you to wait for demand to subside, allowing you to purchase and store gold bars on your own. However, your investment depends solely on the value of the precious metal. Without the extra variables that come with investing through mining companies, you have a strong sense of your investment’s value at all times.
Gold Mutual Funds
Investing in a gold mutual fund is as close to a middle ground of “physical gold vs. gold companies” as the market offers.
Mutual funds have fewer variables than mining companies and come with the perk of not needing to wait for a lagging supply chain. These benefits have made gold mutual funds popular among investors, but they still come with their downsides.
Professional finance managers operate mutual funds, meaning that you invest alongside business experts who have a strong sense of how the gold market will fluctuate. The drawback is that mutual funds often have heavy expense ratios, but the negatives are worth the positives for many investors.
How to Make Gold Investments as Risk-Free as Possible
Now that you know why you shouldn’t wait to invest in gold, keep in mind that risks are still involved if you buy into it haphazardly. Not only can you lose money if you invest at the wrong time, but you could also fall victim to fraud or theft if you work with the wrong companies.
Luckily, there are many simple ways to increase the odds of earning money through your gold investment.
Avoid Futures and Options Contracts
Futures are one of the riskiest investment methods available, even for a reliable resource like gold.
These contracts force you to sell a security on a specific date, regardless of how the market looks. As a result, you might miss out on a peak in value with a futures contract.
It is impossible to escape risk entirely when investing, futures contract or not. However, you can minimize the potential hazards by opting for a more stable investment option.
Invest No More Than 6% of Your Portfolio
Investors never know for sure how their investments will develop. Even stocks that appear bulletproof can falter during imperfect circumstances, which is why the best financial advisors recommend never putting your entire portfolio into one investment.
Specifically, investing no more than 6% of your portfolio into gold will keep you out of trouble if the precious metal’s value were to plummet unexpectedly.
Investigate the Validity of Your Investment Company
Unfortunately, many investors lose more money than they should from working with unqualified or untrustworthy companies.
Stock market investors can lose their investment in gold mining companies that aren’t as stable as they seem, while physical gold buyers can fall prey to scams, purchasing from sellers without verifying the validity of their gold.
Untrustworthy sources scare many people off from investing. But with the right team, you can make timely, trustworthy investments that are as risk-free as possible.
Invest in Gold Today with Oxford Gold Group
From its high demand to relative stability, there are several reasons why you shouldn’t wait to invest in gold. But if you’re having trouble getting started, Oxford Gold Group is here to help.
Our team is committed to finding you secure investment sources for gold and other precious metals. With our help, you can begin building an investment portfolio that sets you and your family up for retirement.
Call (833) 600-GOLD today to speak with one of our consultants.