Due to the financial crisis, many investors are considering an alternative investment for these periods of economic recession since the international stock markets are installed in great uncertainty. An alternative to traditional investment is investment in gold, an interesting option for those who wish to obtain a return on their savings as it provides high liquidity and allows buying and selling without waiting or penalties.
But to make an investment in gold it must be taken into account that, although gold is a safe haven value and provides security, it does not bring dividends and implies additional costs for its maintenance and security, this is because it has a complex maintenance because it can be stolen and deposit it in the safes that supposes an additional cost and this makes the investment made more expensive. Another aspect that can retract the small and medium investor is the ignorance about this financial market, from how to hire it, to the products offered by the market and the pillars on which the evolution of its market is based.
One of the greatest advantages of buying gold for investors is that it is exempt from VAT, this means that compared to other goods, gold does not have a surcharge for this concept. But, in addition, the investor can also benefit from the fact that the increase in the money supply causes the paper money to lose value progressively, something that does not happen with this precious metal, since it does not devalue.
How to invest in gold?
Gold can be purchased in the form of bullion or in shares of mining companies. It can also be acquired through certificates of deposits, gold futures or mutual funds.
- Certificates of deposit: they constitute one of the simplest ways to acquire physical gold in the market, since the buyer of this type of certificates owns the gold, even if they do not have it in their home or in any financial institution.
With the certificates of deposit, it is possible to lower the costs of transport and maintenance of this type of operation and reduce the risks of theft. These operations are limited and cannot be carried out through any financial institution, but rather are instrumentalized through investment banks specialized in this type of operation.
- Futures on gold: one of the peculiarities of this operation is that the spread between buy and sell is minimal. It has some advantages, such as being a product that can be assimilated by the small and medium investor, but as with other more traditional financial assets, you have to be aware of expiration dates, quotes…
- Investment funds: These are funds that invest in shares of mining companies. However, it is a riskier option than that based on companies listed on the Ibex-35 or the Dow Jones, for example.
Their future profitability depends on the moment to enter these funds and also on their exit, as in traditional equities. It can be an option for times of crisis, especially in bullish periods, when the profitability of gold funds is higher than that of others.
Probably wanna read: