Different Forms of Gold to Invest in
Oct 14, 2020
Being one of the popular metals to invest in, gold can come in various forms. The main two categories of gold investment are paper and physical. Investors can buy physical gold, which can come in shape of coins, bars, jewelry, while for paper gold takes form of Exchange Traded Funds (ETF’s), Sovereign Gold Bonds (SGB’s), and investments in shares of international mining companies (Funds of Funds).
Gold jewelry is certainly cherished across many cultures. The concerns here would be practicality, maintenance, outdated designs which all adds up to additional costs.
In the gold coin scheme, coins can be bought from jewelers, banks, finance companies, and even online. In terms of practicality and longevity, of course coins would win, as they are fully for storage purpose.
There are also gold savings schemes, where investors deposit a fixed amount for a certain ownership. At the end the term, you can buy the same piece for the same amount deposited with an earned bonus.
Owning gold in a gold-effective manner can be done through ETF’s. Such investments happen on the stock exchange market. Unlike the physical asset, paper gold does not require to pay for any extra costs. Moreover, ETF’s are most transparent with their prices as it is usually closest to the original price of gold in the market. To become part of this process, all an investor needs is a trading and demat account with a stock broker. It is safe to say, that gold can be bought in a lump sum or in intervals over a period of time. The main expense that comes with this is the payment for managing the account.
SGB’s are issued by the government for investors to buy every 2-3 months. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. SBG’s are beneficial to those who want a long-term investment without any risks.