If the financial meltdown of 2008 and the difficult years that followed taught us anything, it was that we need to take control of our own destinies when it comes to investments. Trust nobody and nothing, as even the most venerable of financial institutions can collapse under its own weight and that of a thousand investors, if the market is subjected to certain winds of change.
It also taught us a lesson that the world leaders and captains of industry from hundreds of years past knew very well – that whoever possesses gold and precious metals holds the most valuable cards.
Whether you are a seasoned investor or you are considering entering the gold market for the first time, here are some tips that you would do well to keep in mind.
Gold means gold
There are those who talk about investing in gold but actually mean putting some money into ETFs, assuming they are “as good as gold” in terms of their value, butdo away with the need for physically owning gold bullion or coins. The trouble is, in an extreme scenario, these funds are as vulnerable as any other and you could end up possessing worthless sheets of paper.Most investors agree that if you are going to invest in gold, do it for real. You can purchase 1 oz gold bars here, along with other forms of gold and precious metals.
Stick to your plan
Gold might be quite different from stocks and shares, but it is still an investment. To convert it into profit, you need to follow a logical and coherent plan, just as you do if you are trading the Forex market or dabbling in Bitcoin.
Making refinements to your plan is fine, but don’t commit to wholesale changes on the basis of a sudden rise or fall in market condition. Gold is a long-term investment, and like anything else, it sees fluctuations on a day to day basis. Let it ride them out, and assess progress on a weekly or even monthly basis to get a true indication of how your investment is performing.
Protect your investment
Physical gold is a beautiful thing to own and enjoy. It is also imperishable, and can withstand extreme conditions. That doesn’t mean you don’t have to look after it, however. Keep your gold properly stored and secure, and if you are holding it at home, look into any reporting obligations you might have on your home insurance schedule. If in doubt, disclosure is always the safest option.
Gold serves as a perfect hedge against market uncertainty. As such, it is important to get the right amount in your investment portfolio. Of course, we all know diversity is the key to risk mitigation, so there is a school of thought that keeping it as low as possible, and even diversifying with other precious metals such as silver and palladium makes sense. At any rate, a holding of 10 to 15 percent of your overall investment portfolio in gold is usually seen as ideal.