Gold has become an increasingly popular investment in the last few years, as more and more people recognize its safe haven status in the face of economic uncertainty.

If you have been considering investing in gold but don’t know where to start, consider the pointers discussed below. If you need help in going further, give us a call at your convenience. We will be happy to provide you with the information and guidance you need.

Why should you invest in gold?

Portfolio diversification is the best reason for investing in gold. While physical gold ownership does not offer a steady income stream – unlike stocks or bonds – it has been proven time and again to be an excellent hedge against inflation, deflation, political unrest, and other investment risks.

Gold has a demonstrated resiliency that is most appreciable in times of economic and financial crises. Unlike stocks, cash, and other assets, it maintains its intrinsic value over time because it has a naturally limited supply. High demand may lead to increased mining, but the supply cannot be artificially increased.

Gold’s value is also not dependent on outside factors such as others’ ability to pay or a management group’s success, making it a rock solid investment.

What type of gold should you buy?

If you’re looking for a relatively easy-to-manage tangible investment, we suggest investing in gold bullion coins. Along with small gold bars, these are the most convenient forms of gold bullion. They are more readily available compared to large gold bars, and are also easier to sell or unload.

Storing bullion coins and small bars is also less complicated and costly. Additionally, the nominal value on most gold coins makes them legal tender, which means they can be carried from one country to another with the corresponding tariffs.

Many gold coins also have numismatic or collectors’ value that could add to their worth.

How much should you invest in gold?

When investing in gold, the general rule of thumb is it should make up between 15% and 30% of your total investments, depending on how volatile you perceive the economy to be. 25% is a good middle-ground.

In the United States, more and more people are investing in gold, given the significant changes in the country’s long-term investment landscape. Families who wish to protect their assets for the benefit of future generations have been increasingly investing in gold.

As with any other commodity, the value of gold also fluctuates. If you want to maintain your investment within a certain percentage of your portfolio, you may have to buy or sell depending on market prices.

When should you buy gold?

Unlike stocks or bonds, timing isn’t a major factor when investing in gold. If you wait until it appears necessary – in the face of a looming financial crisis, for example – you might find yourself in a tight competition with other buyers. This was the case in 2008 when demand for gold surged as the Great Recession set in. While the price of gold fluctuates based on market conditions, the fluctuation is difficult to predict.

The best to time to buy gold is when you feel you’re ready. Gold should be seen as a long-term investment and an effective diversifier that will protect you in times of unexpected financial crisis.