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What You Need To Know Before You Invest In Gold

April 24, 2015

Gold investing can be lucrative, especially if you are investing considerable sums over a long period of time. But you might not understand all the risks involved. If you go in blindly, you are likely to lose quite a bit of money. Here is some gold investment advice that can save you from regretting your investment decisions later.

Study the Gold Market

You might think you are getting a good deal on gold bullion or gold coins, but you may not understand the true value of this precious metal. If you want to know what that value is, you can simply look up the spot gold price online. This is the current market price, and it is rarely the same for very long. In fact, it can change from moment to moment, so to know what gold is worth, you should always check the spot price before you buy.

But different kinds of gold have different values. For instance, gold coins usually have worth beyond just the amount of metal contained in the coins. And any impurities, defects and wear on the gold can depreciate the value. The average investor won’t be able to tell you exactly how much value each gold coin has, which is why they rely on financial advisors. It’s a good idea to use a trusted financial expert to help you make the best decision with our investments.

What to Do with Your Gold

So you have decided to invest in gold, but you aren’t sure what to do with it exactly. You could hoard it up in a safe or put it in the bank, but are you really putting it someplace where it can be safe and become usable when you need it? Some of the best gold investment advice we can give to people is that they set up a gold backed IRA. This allows them to use their gold to offset the cost of their retirement.

The gold sits in the account for however many years the asset holder wishes and it can be cashed out when they are ready. It can also be converted into different precious metals, stocks or bonds. An IRA account gives you options when it comes to what you can do with your gold.

What you don’t want to do with your gold is carry it around with you from vendor to vendor trying to find someone who will buy it. While you may have trouble getting a fair estimate for your gold over the phone or through email, you should definitely be able to get a ballpark figure without having to bring the gold in person. Of course, if you put your gold into an investment fund like an IRA then you don’t have to worry about physically handling it. The investment company takes care of all that for you.

When to Sell Gold   

A gold investment is one that is meant to be sold off at some point. You can always pass it on to your children or grandchildren if you don’t need the money yourself.  Otherwise you should look at holding onto it for at least a few years. The gold price can rise in value as much as 12% each year, though it is closer to 8% or 9% most years. If you can hold onto your investment for a while, you can expect a good return.

The best gold investment advice we can give you for when to sell is to sell when you have made a profit that you are comfortable with and when you need the money. Don’t wait longer than necessary to get the money and use it, as you could be losing potential profit by waiting too long.


Courtesy of TMRCI Gold Investments

A gold nugget can be worth three to four times the value of the gold it contains because they are so rare.
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