How to buy gold: 4 steps to take before investing

00:00:00 Speaker A

More investors are turning to gold as a way to diversify their portfolios in today’s uncertain financial environment. So let’s break down what you need to know before investing in the precious metal. Step one, set your goal. Gold tends to hold its value and sometimes even rise when other assets are falling. So many investors use it as a stabilizer. Typical goals include diversification and protecting your purchasing power from inflation. Step number two, decide your allocation. That’s how much of your portfolio you want in gold to manage risk over the long term. Gold has long up cycles and down cycles, and down cycles, it can drag on returns, so you might keep your allocation lower if that’s a big concern. But if you’re willing to sit through the weaker years, a higher percentage could pay off more in the strong ones. Step number three, choose your form of gold. So there’s the physical gold that includes jewelry, bars, coins. They offer peace of mind but comes with that theft risk and less liquidity. Then there’s something called gold mining stocks. More liquid but also more volatile. Gold ETFs are funds that invest in gold mining stocks or physical gold, and while they do offer more liquidity, they can also come with fees. And finally, gold futures contracts to buy gold later at a set price. They offer leverage and convenience, but also carry higher risk and complexity. And step number four, consider your timeline. Because gold prices can swing, it’s not ideal if you need the money in the short term, an extended holding period gives you a better chance of meeting your goals. And if you want to dig deeper into how to invest in gold, just scan the QR code on your screen.