Five tips to begin your gold investment journey

Any savvy investor will tell you that gold is among the most preferred investment options. After the shock of the pandemic and a succession of geopolitical crises, investors have piled into gold-based investments, taking advantage of the commodity’s stable value and a plethora of investment options. It’s an especially good time for those looking to begin their gold investment journey, with the extra options giving them the flexibility to invest on their own terms.

All they need to do is keep in mind these 5 tips, before starting on their gold investment journey.

Know your gold investment terms

The world of gold investment is dictated by the use of certain terms, which might denote the quality of the metal, the investment tool in use, or even form of gold in question. So it’s advisable to get a primer on the basic gold investment terms. You can start right here 

Decide your investment timeframe

Deciding on an investment timeframe for gold investments can help investors choose an investment with the right amount of liquidity. For example, shorter term investors might choose digital gold, or Gold ETFs, for their higher liquidity, while long-term investors could invest in more illiquid assets such as bullion or sovereign gold bonds.

Pick an initial investment amount

Different gold-based investments have different minimum investment requirements. While digital gold can be bought for as little Rs 1, physical gold requires a minimum investment equal to the price of a one gram gold coin. Therefore, it’s imperative to know how much one is willing to invest initially, before picking an ideal gold-based investment.

Diversify your investment

A core strategy for investing success is to diversify. This principle applies to gold investors too, who might be trying to balance the qualities of different gold-based investments. There is no compulsion to stick to a single gold-based investment, and one can optimize their gold-based returns by apportioning their corpus into a variety of gold-based investments.

Be aware of the extra charges

There are certain associated costs that accompany different gold investments. And in order to make wise choices, every investor must be aware of these itemized costs, whether it’s the expense ratio involved in buying gold ETFs, or even the making charges associated with physical gold.

With these 5 tips in mind, any young investor can make an informed gold investment decision. And with a clear vision and patience, they can reap immense rewards too.

Moneycontrol journalists were not involved in the creation of the article.