Wednesday, August 19, 2020

Best Way to Invest In Gold

If you have been thinking of buying gold for your portfolio either to protect your hard earned wealth from the perils of fiat currency printing by central banks or to simply boost your portfolio return, then there are many different ways to have an exposure to the shiny metal beside the age old way of buying gold jewelry. 

Following are 3 different ways to invest in gold with their respective pros and cons. We will also tell you the best among the three, that we prefer, if you have long term bullish outlook on the metal.

1. Buying Physical Gold Jewelry: This is the age old way of buying gold and we are all mostly aware the advantages and disadvantage of owning gold. Just to mention why we dislike the physical gold investment the most is because of our inability to cash it overnight at market rate.

2. Buying Gold ETFs: Gold ETFs have become very popular since past decade and is a very good way to diversify your assets. The biggest advantage that Gold etf provide over physical gold is that one can invest even very small sums of money and en cash it when required at the market rate without any hassle.

3. Buying Stocks of Gold Mining Companies: This is our preferred way to invest in gold when we have bullish outlook on the metal. The most important reason to invest in gold mining stocks vs gold etf is the dividend income that you receive from these companies. 

When gold prices move higher, the mining companies make higher margin and profits and thus reward shareholder with dividends and buybacks. They also provide higher alpha than actual gold movement due to the positive impact on operative leverage. Recently Warren Buffet invested in world's largest gold mining company Barrick Gold which is based out of Canada. 

Here is the list of top 10 gold mining companies in the world:

We also have a related short Video Log of this post on our Youtube channel:

Related Post: History of Gold Prices in India since 1964

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