Variety of Gold Investments for the Long Term
In addition to the Capital Market, also known as stocks, you can invest in precious metals such as gold for the long term.
Gold investment is one form of investment of a certain amount of capital in precious metals in the form of gold, which has long been known as a commodity with high economic value.
It seems that gold investment could be the right choice for those of you who want to start investing with limited capital. The method is simple and easy to do by anyone.
In general, there are three options in gold investment. First, by purchasing physical assets (gold), then buying mutual fund shares or exchange-traded funds that mimic gold prices, and trading futures contracts in the commodities market (gold futures).
Ordinary people usually buy gold bars or simply collect gold jewelry. Meanwhile, 'sophisticated' investors apply strategies using options on gold futures.
This type of investment is often considered more profitable in the long run because its price tends to keep increasing. The sooner you start investing, the greater the benefits you will gain in the future.
In addition, gold is also easy to liquidate when you need funds for urgent needs, either by selling or pawning it. The forms available include coins, bars, and jewelry.
Facts about gold investment
For those of you who want to know more about gold investment, here are some complete explanations about this promising investment.
- Gold bullion investment for individuals can be in the form of gold bars or coins.
- Mutual funds and exchange-traded funds that invest in precious metals or mining company stocks offer a more liquid and cheaper way to invest.
- More sophisticated investors may trade gold futures or options.
- One can easily buy gold bars (actually yellow metal, in the form of coins or bars), from precious metal dealers, banks, or intermediaries to gold shops.
Forms of gold investment
As explained above, the forms of gold investment can be categorized into several types.
1. Jewelry
Gold jewelry allows someone to enjoy profits while wearing it or as an investment.
Gold is often combined with gemstones and other precious metals to enhance value and support appearance. Gold jewelry is often passed down from generation to generation as family heirlooms.
If you want to invest in gold through jewelry, determine the purity of the gold before purchasing the jewelry. Because the price of 18-karat gold will be very different from that of 14-karat gold.
2. Gold Funds
Investors interested in entering a more liquid and low-cost gold market may consider mutual funds and exchange-traded funds that mimic the movements of gold commodities. Generally, gold stocks rise and fall faster than physical gold prices. However, owning gold stocks carries higher risks.
3. Gold Futures
More experienced investors who do not want to take the risk of large capital outlay choose gold futures or options on gold ETFs.
These contracts represent the right, but not the obligation, to buy or sell an asset (in this case, gold) at a certain price for a certain period. If you guess wrong, the risk is that the premium paid will be greater.
4. Gold Savings
Gold savings allow you to save and invest at the same time. Unlike installment plans or gold financing, with gold savings you do not need to pay a down payment at the beginning.
Simply open a gold savings account and pay for the purchase of stamps, and you can own gold with a minimum weight of just 0.01 grams.
Every amount deposited into the gold savings account will be immediately converted into gold. If you manage to save 0.02 grams of gold in just a week, you could get 1 gram of gold in a year. Imagine if you save for years. Gold savings are also suitable for those who want to learn to invest in small amounts.
5. Gold Credit
Another alternative is to try gold financing facilities. With financing or credit facilities, you can buy gold through installments.
This facility can be easily obtained securely through Islamic banks or pawn companies, with a down payment generally of 10-20% of the gold price, depending on the policies of each service provider.
After paying the down payment, you can pay for the gold in installments every month for the agreed period, ranging from 3 months to 5 years.
It is important to note that the requirements to obtain gold savings products and gold financing facilities are not complicated, and the administrative fees set are quite low.
Through gold financing or gold savings, the purchased gold can also be stored. So, there is no need to worry about loss or theft because it is stored at home.
Author: Dinno Baskoro
