Of course, people consider gold as a nonproductive asset. According to them, the underlying value of gold cannot be quantified. However, you can invest in gold and reap huge returns. So, if you want the best way to invest in gold, stick around. Here are common ways if investing gold for handsome returns.
There are about 33 ETFs that invest in gold, and these include GLD, which is the first and largest. It has an expense ratio of 0.4 percent. The other most popular ones are DUST and AGOL. As of now, there are numerous investors who utilize EFTs in their portfolio. The main benefit of holding gold via an investment product is liquidity
Consider Closed-End Funds
Another way to invest in gold is through closed-funds. These funds usually trade at a discounted price on the underlying asset, but this varies depending on the market. Therefore, if you find one trading option at a discount and you expect the price of gold to rise, this could be an incredible choice. However, it’s important to note that the fees in closed-end funds are 1 to 2 percent higher than those associated with mutual funds or EFTs.
If you’re planning to invest in a closed-end fund, you may want to settle for the Sprott Gold Bullion Fund as it’s probably one of the most prominent options. It comes with a 3-year compounded return of 1.8 percent as well as a 5-year return of 4.4 percent. Plus, it has a front load of two percent plus a 1.09 percent expense ratio.
Go For Single Stocks
You may also want to invest in gold-mining companies. However, it’s important to note that this strategy bears all the regular risks associated with single-stock investments. Choosing these types of stocks takes smart due diligence. And the best performers business organizations with strong production as well as reserve growth. Plus, they must possess good management skills and inventory supported by production.
If you want to keep gold in your safe, gold coins might be the best way to go. Last year alone, the U.S. Mint sold over 500,000 gold coins, referred to as American Eagle coins. If you’re interested in purchasing gold coins, consider purchasing them from a network of authorized dealers comprising of authorized dealers, such as wholesalers, precious metal firms, participating banks, brokerage companies, as well as coin dealers.
Some of the most popular 1-ounce coins are American Eagles, Krugerrands, and Canadian maples.
What about Gold Jewelry?
Jewelry is perhaps one of the most popular ways to hold gold. According to the World Gold Council, this strategy accounts for nearly half of the world’s gold demand. The amount of pure gold a particular item contains (karat number), often varies from 24K for pure gold to 10K. This means that it features 10 parts of pure gold and 14 parts of other metals, making it about 41.7 percent gold.
Gold is rare. It is in high demand. However, if you don’t know how to invest in gold, you might not reap these benefits. The above are top ways of investing in gold for the best returns.