5 Big Mistakes To Avoid When Investing In Gold
Gold is a great investment opportunity because the value is relatively stable and in times of economic crisis, the value usually goes up rather than down.
In a difficult period, many investors will offload stocks and shares and put their money into gold instead. Investing in gold is a great way to build up long term savings and give you some protection if your other investments go bad.
However, a lot of people make mistakes when investing in gold and these simple slip-ups can seriously affect the value of their investment and land them in financial trouble.
If you are planning to invest in gold, it’s important that you avoid these common mistakes.
Not Owning Your Gold
When you are investing in gold, it’s so important that you actually own your gold outright and many new investors don’t check this.
Some companies, like ABC Refinery, will provide you with pure gold bars that you own outright, but other companies may write a clause into the contract that allows them to hedge the gold or lease it out, so you do not fully own it.
It’s important that you deal with a reputable supplier and you check through the contract carefully to ensure that you actually own the gold that you are investing in.
Buying With Credit
Some investors think that it’s fine to use credit to invest in gold because everybody is always talking about how great of an investment it is.
However, even though the value of gold is relatively stable, there is no way that you can predict exactly what the markets are going to do. If you invest with credit and the value of your investment suddenly goes down, you could find yourself in a tricky situation.
It’s best to build a healthy savings account and then if you have some surplus capital, use that to invest in gold.
Only Invest Money That You Don’t Need
Even if you invest your own savings, it’s important that you are only investing money that you won’t need for at least 5 years.
When it comes to selling your gold, you may get lucky and there could be a spike in the price, but in most cases, it will take at least 5 years before you see any meaningful return on your investment.
If you start investing money that you will need in the short term, you could end up in trouble.
Store Gold In Safe Places
When you store your gold, it’s important that you store it in safe locations where the power of politics is limited.
This ensures that you will still have access to your gold in a crisis and it cannot be confiscated from you. Switzerland is a popular place to store gold because they have a decentralized government and decisions are made on a local level, which means the government can’t step in and claim your gold. If you are storing gold at home, you should avoid storing it in a bank.
As long as you avoid these common mistakes, you should see some good returns on your gold investments.