Over the past few years the unthinkable has happened and banks can no longer be regarded as completely safe places to invest your money. For years, people with some cash to spare who didn’t want the risk associated with purchasing stocks and shares would happily put all of their money into a high interest account and wait for it to grow. These days though, you need to put a bit more thought into investments than that and many of us look to alternative ways to ensure that our money will both work for us and be secure. One of the best ways to do this is investing in gold, which can be done in several different ways.
Exchange Traded Funds (ETF’s) track the price of gold to provide investors with exposure to the gold market without physically holding the gold. ETF’s are backed by physical gold bullion held in secure vaults. Mutual funds are also offered on gold as well as other commodities. These are professionally managed funds that are funded by shareholders and they tend to have a minimum investment amount to discourage less serious investors.
It is possible to buy physical gold bullion such as Betts gold bars. This is the easiest and safest way to invest in gold. You will know the value of the amount of gold bullion that you own and you know exactly where your own gold is. Most people purchase the physical gold bars and then store them securely at a bank. You are entitled to access and sell your gold at any time so there are no restrictions as to when you can release the funds from your investment. Gold bullion is traded by big investors owing to the size of the gold bars. A standard bar of gold bullion weighs 400 troy ounces, although larger ones are available for the biggest investors.
If gold bars are a little outside of your price range, you can invest smaller amounts of money in gold coins. The most popular coin to invest in is the Royal Mint Britannia gold coin. A new coin is produced each year and can be purchased at a rate of just above the price of gold on the day you buy it. If the price of an ounce of gold is around £825, you could probably expect to pick up a Britannia gold coin for around £860. Most people take possession of the physical coin and keep it safe themselves rather than placing it with a bank. Coins are available either individually or in tubes of 10.
Stocks and shares
It is, of course, possible to buy stocks in gold mining and exploration companies, which is another way to invest based on the price of gold. You will also have the added advantage of profiting from healthy dividends. However, this carries with it the same risk as investing in any stocks and shares, in that if there was a problem within that company, you could lose a lot of money.