HOW TO INVEST INTO GOLD?

There are two main methods of investing into GOLD,

1. PHYSICAL GOLD:

The first is to purchase Gold coins or Gold Bars Physically. Or even in the form the Jewellery.

1. Hedge during a crisis.

The Benefit of this is should the entire MONETARY SYSTEM COLLAPSE as Ray Dalio is saying could be a possibility.

Then you have the gold physically, so if we reverted back to a Hard Money backed currency. Then this would become even more valuable.

To a greater extent Physical gold is extremely useful during times of war or when you are unsure about the stability of the country or the financial system.

For example, If a Government became extremely corrupt or was taken over by a rebel party.

They may attempt to own all the cash in the banks.

If you have the physical Gold, you can pack this into a bag or ship it to a foreign country for safety.

The UK government even shipped the physical gold from Bank of England’s Vaults to Canada during the war.

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Of course this an extremely unlikely set of circumstances if you are based in a Modern country with a government you trust.

Another rare scenario which will  make physical gold a vital hedge would be if the Exchange Traded Fund institute or ETF Financial Markets collapsed.

A fund is just a collection stocks or securities which track a particular market this could be an Index like the S&P 500 or a Commodity like GOLD.

For example, Imagine the I shares S&P 500 ETF,

iShares, is part of the BlackRock Group. This investment firm has purchased the stocks in the S&P 500 in order to track this index.

But imagine one day there was a major financial crash likes say a hack or government takeover and NOW exchanges weren’t allowing you to sell your ETF!

Your wealth would be effectively trapped.

RISKS WITH PHYSICAL GOLD?

However, During normal non crisis circumstances the purchase, sale & storing of physical gold can be more time consuming, Laborious and dangerous.

For example, If I wished to purchase some gold coin I would have to order it from a broker first. Then verify that the physical gold was real, unless you just trusted the firm at face value.

Then you need to store this physical gold.

HOW DO YOU KEEP THE PHYSICAL GOLD SAFE?

If you have just a few gold coins You could stick it under your mattress I suppose but more likely you would need an extremely secure & hidden safe or vault.

But then what if your house gets robbed or the Vault you have paid gets robbed.

We have all seen those movies when they take the home owner to their safe & ask them for the code & gun point!

And we have all seen Oceans 11.

LIQUIDITY?

The other issue with gold is liquidity if you wish to sell your physical gold bars or coins you need to find a buyer.

On a practical note you may even need to smelt down the gold into smaller units in order to sell.

To find a buyer, You may have to go to a Jewellers or gold market…but during a crisis situation would they be open?

Also if you find a suitable buyer, you have to be careful of scams & Robbery.

Method 2. GOLD ETF:

The First type of GOLD ETF is the Physical Gold ETF this is where the investment firm say I shares has purchased PHYSCIAL GOLD which is stored in a Bank Vault in Switzerland.

HIGHLY LIQUID:

The I SHARES PHYSCIAL GOLD ETF tracks the gold price of this physical gold in the vault and then creates a market to allow shares in this fund to be easily bought or sold to anyone in the world.

The GOLD IS DIRECTLY owed by I Shares or Blackrock & never changes hands but the shareholder owns the FUND which REPRESENTS THE GOLD.

Thus we do own it but through an INTERMEDIARY party, which is usually Backed by the government or some type of FINANCIAL SYSTEM. Which is an insurance or risk whichever way you wish to look at it.

BE CAREFUL WITH SYNTHETIC ETF’s which don’t actually own any physical gold.

These track the gold price by investing into futures or options. Which gives you the option to buy at some GOLD at a future price point.

These FUTURES ETF’s are very risky so I would not advise investing into them unless you have a extremely thorough understanding of exactly how to market works

SO WHICH METHOD of GOLD INVESTING IS BEST FOR YOU?

Physical Gold or Physical GOLD ETF.

I would only recommend buying some physical gold if you have a vast amount of wealth to store & you have faith it will be safer in your house then in the financial system.

For most people a PHYSCIAL GOLD ETF is the most practical.

Even the great Millionaire shark tank investor uses a physical gold ETF to allow his position to trimmed to 5% always.

My favorite is the I shares Physical Gold ETC or Exchange traded commodity.