Call Us

Buy - Sell - Trade
Gold Prices Silver Prices Interactive Spot Prices

Speak to a non-commission broker TODAY!


Questions? Call Us


Long-Term Assets: How to Invest in Gold for Beginners

how to invest in gold for beginners

Gold is one of the oldest investment strategies, and is a rare metal. In 2020, gold hit an all-time high price, and even though the prices have leveled out, it is still an asset.

Have you considered buying gold? It may seem overwhelming, but with the right strategy, it can be a hedge against inflation. Keep reading our guide on how to invest in gold for beginners so you can learn more about investing in gold.

Why Should You Consider Investing in Gold?

You may be wondering why you should invest in gold. One of the biggest reasons is that it is considered an inflation hedge. Gold is an investment that protects the purchasing power of this currency from any rising inflation costs. Meaning, an inflation hedge either increases or maintains its value for long periods of time.

For example, the U.S. dollar is not an inflation hedge because its value will decrease over time. On the contrary, you can purchase the same amount of goods with an ounce of gold that you could 200 years ago. Recently, inflation hit a 40-year high.

However, you don’t want to have all your assets in gold. However, gold is a great way to protect yourself from inflation and can help you diversify your portfolio.

How to Invest in Gold

Now that you understand why you should invest in gold, you probably want to know how to get started. Lucky for you, it’s easier than ever to invest in gold—and you have options.

1. Physical Gold

Buying physical gold is the easiest and most straightforward way to own gold, whether you buy it in-person or online. Investment gold is called “bullion”.  Bullion comes in bars or coins; both are sold by reputable dealers. Although gold jewelry is typically the most popular type of physical gold, it is not sold by these dealers.

Buying physical gold gives you a tangible asset. There is a sense of control and security by owning and having a tangible asset.

If you choose to purchase gold coins or bars, you need to be careful when you chose a dealer. There are dealers that will mark up gold 30, 40, or even 50%.  At some point all gold will trade at the same price, regardless of what you paid for it.

You need to think about a way to store your gold. Buying a quality safe or getting a safe deposit box are the most common ways to store your gold.  Always store it somewhere safe away from harmful elements like extreme temperatures and moisture.

Also, you can store your precious metal in an IRA.  This process allows you to own physical gold but not allow you to physically hold it.

2. Gold Mutual Funds

You can also own stock in companies dealing with gold, through a gold mutual fund. This mutual fund gives you a portfolio of gold mining companies, instead of just one company.

You can use this to diversify your portfolio, but there may be higher fees. If you are considering these funds, work with a broker you trust to advise you on the best options.

3. Gold Stocks

If you are looking for growth potential, you may want to consider gold mining stocks. Gold retains its value, but it does not provide interest. Instead of the physical gold, you invest in the gold mining companies.

However, you are not investing in gold—you are investing in that business. This comes with inherent risks if you take that route, so make sure you pay attention to the mining companies.

4. Gold Exchange-Traded Funds (ETFs)

If you want to invest in gold but don’t have a way to store it, you can look into Gold EFTs. An EFT holds the gold bullion at a storage facility and allows investors to purchase shares of this fund.

You won’t have to physically manage or handle the gold. You can purchase gold EFTs at a brokerage fund. However, if you want to physically see your gold and have control, this may not be the right option for you.

5. Gold Futures

Gold futures are probably the riskiest way to invest in gold. Gold futures are contracts to buy in sell gold in the future (or at a later time). This contract represents a specified amount of gold, and you can pay either the dollar amount or use physical gold.

Investors have the option to purchase a futures contract at the present price. This strategy may not be the best idea for beginners, but you may want to consider it in the future when you have more experience with futures and options.

What’s the Best Strategy on How to Invest in Gold for Beginners?

If you are new to investing in gold, you may wonder where to start. The truth is that there is no perfect strategy and there are risks and rewards with each option.

You need to determine your goals and why you want to invest in gold. Do you want to protect yourself from inflation? If so, buying physical gold may be the right option for you. If you want an asset that produces income, you may want gold mutual funds or stocks.

Keep in mind that you may want to use gold as part of your total strategy. You should diversity all your assets without putting yourself at too much risk.

You can even consider getting a gold and silver IRA. You will own physical gold and silver instead of paper assets, and when you liquidate, you can take delivery of your gold or silver.

Ready to Buy Gold?

With inflation hitting a 40-year high, you may want a more stable commodity. Now that you know how to invest in gold for beginners, you can start looking for a reputable dealer to give you the best price available.

CMI Gold & Silver Inc., in business since 1973, buys, sells, and trades all the popular forms of gold and silver. We have some of the lowest prices among established dealers, and our buy prices are typically among the highest.

Contact us today for friendly and reliable service.

Leave a Comment