Should I Invest In Gold?: 6 Key Factors to Consider

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If you’re looking for a brilliant investment, few shine brightly as gold. But this doesn’t mean gold is the right investment for everyone.

Should I invest in gold? Here are 6 important factors to consider before investing in gold. 

1. What Are You Investing In?

It’s important to note that investing in gold doesn’t always mean you are buying physical gold. It’s possible to invest in a gold mining company and still reaps the many benefits of gold investment.

There are pros and cons to either method, but investing in gold stocks are usually more affordable than physical gold. Investing in stock works for anyone who can stomach market fluctuations. 

2. Beware the Scammers

Paper gold is a certificate that replaces physical gold investments. Your certificate tells you how much your gold investment is worth, but you never actually see the gold yourself.

Be sure to work with a reputable company when investing in paper gold. Counterfeit certificates are not uncommon. 

Verify the background of the broker asking for referrals when possible to avoid losing money to scammers. 

3. Where to Store Gold

Should I invest in gold? The answer to this question depends on whether or not you actually have a place to put the gold.

Physical gold requires safe storage. Many people use climate-controlled storage units or safe deposit boxes. The only free way to store your gold is at home.

Make sure you invest in a strong, fireproof safe if you decide to keep gold in your house. Your bars or rounds can be passed down for generations when kept in a safe, secure location. 

4. Not All Gold is Equal

There are many factors that influence the value of your gold investment. With stocks, the currency market dictates the value of your gold.

With gold coins, the value is based on the coin’s rarity because it is considered collectible. If suddenly a large amount of the same coin floods the collectible market, the value decreases.

It’s possible for gold nuggets to decrease in value while the price of your coins goes up. 

5. Beware of Taxes

Gold is considered a collectible by the IRS. You owe capital gains taxes when you sell your gold for a profit.

For this reason, it’s a good idea to hold on to your gold over time to reap the appreciation benefits without being subject to taxation.

6. Gold Prices Are Inflated

When you’re asking yourself ‘should I invest in gold,’ you should also consider what you’re willing to pay for the physical asset. The price of physical gold is inflated so that the seller can make a profit.

For example, if you buy a gold bar valued at $10,000, you’ll pay more than $10,000 to cover the cost of the premium on the sale. This premium helps cover the costs of the seller or broker.

Should I Invest in Gold?

Gold has maintained its value better than any other currency over the centuries. If you’re wondering ‘should I invest in gold,’ consider the amount you want to invest.

If you can afford to pay the expenses related to owning physical gold, this might be a great option for you. You’ll enjoy a physical asset that continues to appreciate over time.

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