Saturday, June 1, 2013

Gold Investing Strategies | Gold Trading

Gold investing, believe it or not, is still considered a standard for monetary exchange in many countries to this day. Gold is probably one of the most liquid investments and is traded in the stock market" 24 hours a day everywhere in the world. In other words, this means that you can buy and sell gold in just about every country. There are different formats you can choose from gold investing, such as gold bars or coins, gold accounts, gold mining shares, gold stock, gold futures, and gold certificates.

Gold investing, as compared to other market sectors, can be quite complex and intimidating for investors who have not yet researched it in depth. Gold investing stands out as a diversifier and with your stocks, bonds and cash, gold can help offset variations in the market. There are a lot of financial consultants that recommend having at least 5% of gold in their stock portfolio. Some gold investors believe that a reasonable distribution of gold in a moderate, diversified portfolio is 5% to 15% during a bull market in gold and is 1 to 3% during a bear market in gold. This allocation will provide stable insurance for your stock portfolio, portfolio diversification, and excellent long-term return on investment. With gold up in price 23% in 2006, gold investing offsets weakness in other investments.Gold is in a bull market because its core investment fundamentals are so outstanding. The gold price, like every other commodity or stock, is ultimately driven by supply and demand. When gold investing, coins are a popular way to invest as they are easy to buy and sell. Gold bullion coins are priced according to their weight. The most popular bullion gold coins are the South African Krugerrand, the Canadian Gold Maple Leaf, the American Gold Eagle and American Gold Buffalo.

Traditionally, gold investing has provided the best protection against financial disaster and turmoil. In circumstances such as currency deflation or high inflation, gold investing offers you both safety and security. The extent of the upside potential for gold is a function of the amount of paper assets that would be sold off and converted to gold, in the event of a financial catastrophe. If you have only paper in your stock portfolio, know that gold tends to move in the opposite direction of paper investments when stock trading.

Gold investing in gold mining shares is when you invest in the mining companies searching for the gold and not in the gold directly. The appreciation potential of a gold share is depending upon the future price of gold. When gold investing, it is important to note that many mining firms sell their future production years in advance. This means that with gold mutual fund investing your risk is more varied. Some funds offer a broad mix of international mining stock.

Frequently Asked Questions

    What is a good investment when the market is up?

    I've started learning about investing over the last couple of weeks. Right now, since the market has been going up very fast over the last few weeks, I'm waiting for it to go down again to invest in some index funds. That is, I'm trying to use a value based investing strategy.

    But meanwhile, is there something good to invest in when the market is up like this? Something that would go up when the market eventually goes down some?


    What are the most important rules/advices for investing in gold?
    I have a girl who's almost a year old. During the next years I would buy her gold from time to time. But I want to know what would be the best way? Whent to buy? Sell? And how to manage gold investment?

    • ANSWER:
      Visit this site

      To get free tips from Wall Street Professionals and receive reports, charts and strategies on investing in gold.

    How does investing in gold work and is it worth it?
    I want to start making my money work for me. Is gold the best option?

    • ANSWER:
      There are several ways to invest in gold.

      Buy gold coins. Disadvantages: have to store them, have to pay mark up to buy and mark down to sell. Subject to theft.

      Buy GLD. ETF that tracks the price of gold. Disadvantages: Has annual expenses.

      Buy gold mine stocks. Disadvantages: subject to management mismanagement. Try this site

      To get free tips from Wall Street Professionals and receive reports, charts and strategies on investing in gold.

    What do you think about the Gold prices? Is it likely to increase or decrease with in the coming months?
    Planning to invest in to it, is it a fair idea?

    Could you plz help me out with this, keeping in mind the current Market Scenario relating to the Indian & US Market ??
    Thanks you for the Answers Guys.

    I have also heard it would go as low as 18 k in few months (Though it seems unbelieveable but can it really happen )

    • ANSWER:
      Gold is a great investment, but only if you do it right. The usual procedure is to have 5% of your portfolio in gold and just hold on to it forever. This is known as "buy and hold forever" or "little old lady strategy." The gold is supposed to be there for emergencies only, when all other assets decline to nearly worthless.

      When the economy is doing well, the purchasing power of gold tends to decline at an annual rate of about 1% (plus a lot of random bouncing around). In times of financial crisis it goes back up to where it was (adjusted for inflation). To put it another way, gold ownership is a form of insurance. It's like having homeowner's insurance: if your house never burns down, the insurance premiums are just money down the drain, but still money well spent.

      If you are asking what gold will be doing in the coming months, you are speculating, not investing. That kind of speculating is best left to hedge-fund managers who have sufficient expertise and diversification.


      Even companies that own gold mines don't try to predict the price of gold. Instead they sell gold futures 18 months out. They sell just enough contracts so that no matter what happens to the price of gold they come out even. Gold refiners and jewelers do the same thing, buying futures contracts as a hedge against price fluctuations.

    What can you tell me about UTMA and investing in gold, silver, aluminum, and oil?
    I understand the UTMA regulations prohibit minors from directly owning equities. Do these same restrictions apply to gold, silver, oil, aluminum, steel, etc.? If not, what would you suggest to invest in, and is this strategy better than investing in such other means as mutual funds, bonds, or money market accounts? Thanks!

    • ANSWER:
      I'm not sure I understand your statement "UTMA regulations prohibit minors from directly owning equities". A UTMA account CAN own stocks. I suppose that technically the minor doesn't own the stock since it's the account's "trustee" (normally a parent or guardian) that has legal responsibility for the account, but the account is for the benefit of the minor and can legally only be used for things that benefit the minor (e.g. college tuition, summer camp, etc.) so for all practical purposes it's the same thing.

      I don't know of any rules that prohibit ownership of things like gold and silver, though I suppose it's possible. I've never read the UTMA rules word for word and have never invested in commodities in my kids' UTMA accounts.

      I personally would question the wisdom of buying into things like that now anyway. Nearly all commodities have risen dramatically in price over the last year or two. While a certain amount of that is basic supply/demand, I think a lot of it is speculation (i.e. people looking to make a quick buck buying into the latest fad investment). We've seen what happened with tech stocks about 7 years ago and real estate over the past couple years. I think there's a good chance that the same thing (a price collapse) could happen in the commodities that have run so far up in price. As soon as there's a period of declines, I suspect that many of the speculators will bail out driving prices down even more. I personally think commodities are a high risk investment at this point.

      As for what the best thing to invest in, that will vary depending on how soon the money is needed, risk tolerance, etc. Over long periods of time, however, stocks have historically provided the highest returns of any asset class, so that's my preferred investment for long-term gains.


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