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Gold prices have hit several new milestones in 2024, the latest being a new All-time high of $2,435 In late May, per oz. Gold prices have been falling in recent months — Today’s Price Gold prices are around $2,404 per ounce (as of July 12, 2024) and have risen about 15% year-to-date. As a result, there has been increased interest from investors looking to protect and generate profits from their portfolios.
And gold is excellent Hedge against inflation And can help Diversify your portfolioSo, you may be wondering which gold options you should invest in and which options you should avoid. After all, Actual gold coins and bars It is worth considering. For example, Gold IRA or Individual Gold Stocks Instead.
That being said, Types of Gold Investments In today’s investment environment, some options may make more sense than others, and depending on your goals and unique financial situation, you may want to avoid some options. Here are some gold options that some experts say you should avoid.
Find out now how the right gold investments can benefit your portfolio.
Should You Invest in Gold? Experts Recommend Avoiding These 4 Options
According to experts we consulted, if you are investing in gold, you may want to avoid these gold assets.
Gold Jewelry
One option the experts we spoke to recommend avoiding is Gold Jewelry.
Ryan Jacobs, founder of investment firm Jacobs Investment Management, says investing in gold jewelry is generally not a good idea because manufacturing and design costs make it much more expensive than its gold content.
“When you sell your jewelry, you often get less than the actual value of the gold,” Jacobs says.
According to Brandon Thor, CEO of precious metals company Thor Metals Group LLC, you can rule out gold jewelry as an investment, as long as it’s not including a romantic investment.
“But from a financial perspective, it’s not a good investment,” Toll said.
and, Gold watch “While there is growing interest in investing, these are still areas that new investors should consider carefully,” said Brett Elliott, director of marketing at the American Precious Metals Exchange (APMEX).
“It’s a niche area that’s become very popular recently, but the value of a watch depends on small factors like whether it has been worn,” Elliott says.
Find out more about the gold investment options available to you here.
Physical gold (depending on investment horizon)
According to Alex Evkarian, COO and co-founder of gold investment firm Allegiance Gold, short-term investors should avoid investing in physical gold if: Gold coins and bullion.
“For day trading or short-term ROI time frames, consider investing in a liquid gold ETF,” Ebkarian said.
That being said, Evkarian Buy physical gold It can be a good choice if you understand the costs and fees involved in purchasing it, but it’s also important to understand that prices fluctuate and that you should expect a mid- to long-term ROI.
Gold Futures and Exchange Traded Funds (ETFs)
James Rickards, author of “The New Evidence for Gold,” believes gold should be avoided as an investment. futures and ETFs.
“Investors need to understand that gold investments such as futures contracts, exchange-traded funds and gold options are not investments in gold, but rather securities that I call ‘paper gold,'” Rickards says. “If you’re only looking for short-term price fluctuations, you’re not going to physically own gold.”
Rickards believes Investing in physical gold They may be easier to sell in the event of a future crisis, making them a better option than ETFs or futures.
“Any future crisis would likely shut down futures and stock markets, preventing people from realising the value of their paper gold contracts when they need it most,” he said.
However, not all financial experts agree with Ricardo’s view. For the average investor, especially individual investors, ETF John Gilbert, executive vice president at registered investment adviser Bradley Foster & Sargent, said tracking directly with the price of gold is the best option.
“For example, a more liquid option is the GLD ETF,” Gilbert added.
Shares of gold mining companies in the exploration or development stage
Another option that some experts say should be avoided is stocks of early-stage gold mining companies.
“Most investors should avoid exploration and development stage stocks altogether, or at least limit their purchases to a small amount (say 1% to 2% of their portfolio),” Gilbert says.
Conclusion
Gold can be a smart hedge against inflation, which is especially useful in today’s economic climate. But before investing in gold, understand the following possibilities: Pros and ConsAnd whether you invest in physical gold or an ETF, 10% of the portfolio Invest in this asset. “There are risks associated with concentrating too much of your net worth in any one asset class, so don’t go ‘all in,'” Rickards says.
