Another year is looming, and many Americans are starting 2023 by reviewing their finances and reassessing their investments. Faced with stock market volatility, international unrest and a potential recession, some investors are turning to gold as a safe haven for their investments.
Historically, a common investment strategy has been to use gold as a store of value in turbulent times. But can you make money investing in gold? While investors usuallyto help diversify and stabilize your portfolios, it is possible to make money by investing in gold.
If you think investing in gold could benefit you, start by ordering your free Asset Protection Kit to learn more about this unique opportunity.
How can you make money investing in gold
One of the easiest waysis to buy gold bars and coins that may increase in value due to inflation or world unrest. According to the Financial Post, during the financial crisis of the late 2000s, large investments in gold pushed the price of gold from $800 an ounce in 2009 to $1,900 in 2011.
Similarly, gold investment has surged during the pandemic, pushing gold prices from an average price of $1,393.34 in 2019 to an average price of $1,798.89 in 2021, according to MacroTrends.
If you prefer not to deal with the hassle of storing physical gold, you can opt to hold gold stocks, the prices of which fluctuate with the price of gold. Like companies in other sectors that perform well regardless of industry trends, some gold mining companies are well managed and profitable even when gold prices fall. In addition, a small increase in the price of gold can result in significant gains for some gold stocks, providing a higher return on investment for their shareholders than owners of physical gold.
Gold exchange-traded funds (ETFs), a collection of shares of gold mining companies, are another option for potential gold profit. Many investors prefer ETFs to individual gold shares to spread their investment risk.
Of course, investing in gold stocks and ETFs is subject to the same fluctuations as the stock market. This means that your investments may fall during a stock market crash, even if gold prices remain unchanged.
Learn more about making money by investing in gold with Goldco’s free wealth protection kit!
How can you not make money investing in gold
As with any asset, investing in gold carries the potential for a drop in value, so it’s important to understand the risks before investing your money. One way to reduce the likelihood of losses is to avoid riskier types of investments. For example, some experts warn against buying:
- Proof Coins: These are special edition coins designed for collectors, which the United States Mint says are the highest quality coins it produces. These coins may be overpriced due to collector demand, and their gold value may disappear depending on market conditions. coins from a reputable dealer may be a safer bet.
- Fractional Coins: As the name suggests, fractional coins are available in fractions of an ounce, such as half an ounce or a quarter ounce. While these coins are an inexpensive way to invest in gold for many, they carry a higher margin than one-ounce coins, ranging from 9 to 15%.
- Gold futures and options: Futures and options are the riskiest form of investing in gold. These speculative investment options can yield both higher returns and catastrophic losses. Because the risk is so significant, many online brokerage houses require you to sign additional forms confirming the potential danger posed by these derivatives.
Although you can make money from it, proponents of the yellow metal typically see it as a tool for preserving wealth rather than growth. Traditionally, the stock market usually yields higher returns than gold. According to MacroTrends, from 1990 to 2020, the price of gold increased by about 462% from an average closing price of $383.73 to $1,773.73. Over the same 30-year period, the Dow Jones Industrial Average (DJIA) has increased approximately 1,003% from an average price of $2,679.45 in 1990 to $26,890.67 in 2020.
In shorter periods, gold can outperform the stock market as investors react to inflation, global turmoil and other factors that push investors towards gold. But in the long run, the stock market provides a much higher return on investment. As such, it is best to view gold as a safe haven and a way to go about it.
Learn more with Goldco’s free asset protection kit now.
the most important
Making money with gold is possible, although wealth protection may be a more appropriate goal. As with any investment, considerand how gold can help you achieve your financial goals. For example, seniors looking for income-generating assets can probably find better options than gold. However, if you are looking for , investing in gold can make sense. You can start exploring your gold investment options by looking at the companies in the table below.