How to Invest In Gold As Protection Against Inflation

Gold is one way to protect yourself from inflation. There are a couple of ways to own gold. Here is how to get started.

Since January of 1975 is has been legal for US citizens to own gold. You may buy gold direct from a coin or precious metals dealer or invest in shares of physical gold that are held in trust in a vault for you.

The SPDR Gold Trust, symbol GLD is an exchange traded fund. In other words you can buy one share our a hundred from one trading fee through a discount broker. The price of one share of GLD is roughly equal to one tenth of one ounce of gold plus a small management fee.
Buying shares of GLD allows you to own gold without the hassles of storage, security and shipping.

Another way to buy gold is through a reputable precious metals dealer such as the American Precious Metals Exchange or APMEX. Through these dealers you can buy generic gold bullion at prices just above market spot price. You can find gold bars in sized from one tenth to one ounce and up as well as minted gold coins such as Canadian Maple Leafs which have a very pure gold content.

Other forms of gold ownership include buying coins that have numismatic or coin collecting value. Old US gold eagles can be worth up to several thousand dollars depending on condition and year of coinage.
Both forms of gold ownership have their own advantages.
Gold can be owned in an IRA in both physical form, stored by a trust company in a vault for you, or in the form of shares of a fund such as GLD.

How to Buy Gold in 2008

Gold is expected to top the $2000 mark and you should be ready. Gold is the only investment that has held its value for over 100 years. An ounce of gold will buy the same amount of goods and services today as it would 100 years ago. You can't say that about your dollars.

The first thing you need to know is why you should invest in gold today. All of us feel the pinch of inflation everyday, but not too many of us realize what causes it. Our government printing presses are running overtime printing more money to cover their debt payments. As the money supply increases the value of every dollar decreases.

With all of this fresh printed money creating inflation people turn to a more safe and trusted investment. A lot of smart investors are turning to gold as their safe haven to weather the coming economic storms.

It is not surprising to find out that gold increases in a recession is it. As the money supply increases, the dollar decreases and gold rises in value. Any downturn in the economy is a signal to buy gold.
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Buy Gold

Experienced investors have long known that gold can be a solid investment choice. It's stable in times of worldwide uncertainty, or when the economy is bad. Used correctly, it can be an effective component of a diversified investment portfolio, but remember, it is an investment like any other, and has an element of risk (albeit more modest). It's essential to achieve the proper mix.

Be familiar with the five principal ways to invest in gold: tangible coins and bars; certificates; precious metals mutual funds; stock in mining companies; and gold and metals futures.

Go with coins or bars if you're interested primarily in safety and diversity.

Break down tangible gold into its subcategories: bullion and numismatics. Gold bullion (or bars) is pure or almost pure gold. Numismatics are minted coins, which often commemorate special occasions.

Search for both online and brick-and-mortar precious metals dealers. Find out how long the dealer has been in business, whether he or she specializes in one segment of the market, and who the typical client is.

Shop around. The markup on coins and bars will vary. One popular choice for coins is the 1 troy ounce size as they are easy to buy, sell and store.

Educate yourself about the numismatics market. The design and condition of a coin can affect its price as much as the gold content itself.

Choose certificates if you would rather not store anything. A certificate represents ownership of a certain quantity of gold.

Consider stocks and funds for additional choices. Gold funds, because they are diversified and managed, are the most stable. Stocks are less stable, because you're buying into only one company.

For a higher risk/higher potential return alternative, consider gold futures if you feel confident of your ability to predict whether the value of gold will increase or decline. Futures are a contract to buy or sell at a particular price at a specific point in time. Doing well with them depends solely on what happens to the value of gold during the contract term.

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