- Individual investors can invest in gold in two ways: physical bullion (bars or coins), or securities (stocks, funds) that represent gold.
- While bullion is a more direct, “pure” way to own gold, securities are easier to hold and can appreciate.
- Analysts recommend investing 5 to 10% of your portfolio in gold, as a long-term inflation hedge and diversifier.
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Ah, gold. It’s rare, accepted everywhere, and governments can’t print it at will. These are the reasons that some folks — fondly known as “gold bugs” — have always invested heavily in the honey-hued metal. And in times of financial chaos, they’re not the only ones.
“History has shown that during economic slowdowns, from the Great Depression to the COVID-19 pandemic, gold appreciates in value,” says financial analyst James Jason of Mitrade, a commodities trading platform.
No matter what the state of the economy, gold offers a good way to diversify your assets. Many financial advisors recommend keeping anywhere from 5% to 10% of your portfolio in it — perhaps up to 15% in times of crisis.
Individuals have two main ways to invest in gold:
- Physical gold, or bullion (the most obvious, but not necessarily the least expensive)
- Gold securities such as stocks, funds, and futures (less of a pure play, but more convenient)
Let’s go digging into both.
How to invest in physical gold
Physical gold comes in many forms and sizes, each with its own characteristics and costs.