Understand that the media exposure and demand for gold among retail and institutional investors stems from a medley of economic factors and market forces. Consider that the money printing policies adopted by government central bankers worldwide to fight the current economic downturn and elevated unemployment levels have stoked fears of inflation and subsequent depreciating values of paper currency.
Gather that these fears have been exacerbated by survivalists who have turned to gold out of fear for armageddon scenarios. As a result, realize that speculative traders in the commodity markets have further stoked demand fostering a bull market in the metal that gold mining companies have also profited from and promoted.
Types of Gold People Are Investing In
Explore a range of gold investment vehicles that provide exposure to the growth and profitability in the market. Capitalize on the benefits of physical gold possession in the form of bullion bars and coins. Purchase gold gold bullion bars starting at 1 ounce to weights exceeding 100 ounces. Acquire gold coins like the American Eagle. Know that gold coin pricing is based on perceived collector value and gold bullion is determined by the market price per ounce.
Invest in gold with a variety of securities and vehicles that provide exposure to the gold market without having to take physical possession. Capitalize on exchange-traded funds (ETFs) like streetTracks Gold Shares (GLD) that facilitate the purchase of gold like that of purchasing and selling traditional stocks. Research these tools that track the price of gold on the commodity market.
Moreover, consider purchasing the stock of publicly traded gold mining companies like Newmont Mining (NEM) and Barrick Gold (ABX) that typically experience growing profit margins as the value of the metal rises. Be aware that the values of companies are more volatile than the price of gold. Know that while the value of the metal rises, the stock price of a company may fall.
Investing Through Your 401k or IRA Account
Know that it is unlikely to invest in gold through a current 401k retirement account unless the plan offers funds that include gold mining equities. Explore, nevertheless, some other possibilities to access the gold market with a retirement account.
If you are no longer employed by the firm holding your 401k retirement plan, you can transform your account into a gold investment. Liquidate the existing retirement account, and shift the funds into a gold backed IRA or a self-directed IRA.
Realize that a gold backed IRA enables you to hold gold bullion bars, legal tender gold coins and gold mining stocks whereas a self-directed IRA provides you the discretion to invest in the instruments you choose. Ensure you perform this transaction with an established broker to avoid any tax liabilities.
Understand that the appreciating value of gold provides safety against market volatility and the risk of inflation. Whether you choose to have exposure to the metal through gold bullion or an ETF, trust that you accentuate the prowess of your retirement savings strategy with an investment in this precious metal.
John Kund is a financial blogger with special interest in the precious metals market. He started out his career as a wealth advisor and has helped many Americans make smart investment decisions.