With all the uncertainty around stocks and currencies at the moment, investing in Gold or Silver can be a good option for people looking to diversify their portfolios.
Both Gold and Silver have been used as a hedge against financial insecurity and have been used as a store of value for almost as long as civilization has existed, and it’s not going to lose that type of status any time soon.
There are 3 common ways that people can easily invest in gold or silver., with each having advantages and disadvantages.
Buying Physical Gold or Silver
Buying physical gold or silver is a great way to hedge against capital controls imposed by governments, and there is no risk of a company going broke and you being unable to convert your paper gold into real gold, however, it’s not really the type of thing you want to have sitting in your living room at home or under the bed, as it’s very easily stolen.
Here are a few places you can buy gold and silver in Australia:
Investing in Gold or Silver Companies on the Stock Market
Investing in a company on the stock market that deals in gold or silver is a great way to get exposure to gold. The obvious benefit to this type of investment is that it has a very small barrier to entry, with most stocks requiring only a small $500 investment to get started.
The major drawback is that you aren’t just investing in gold or silver, you are also investing in the companies future prospects and hoping the board is making good financial decisions on your behalf. The other big problem is that if the company goes belly up, you are pretty unlikely to get your money back.
Investing in Gold and Silver CFDs
CFDs are another fairly easy way to invest in gold or silver, and most Forex brokers provide this type of investment option. The major benefit is that you are buying and selling just the metal, with no company overheads to worry about like the stock market option. The major negative is that you don’t actually own any gold, just the paper version, which isn’t really worth anything if a major financial uproar takes hold.