If you are hoping to invest in gold and make a profit there are a number of ways that you can do this. It is important to remember that no investment is foolproof though, and even these options may not always turn out as expected. This is especially true if you do not do the necessary research and use due diligence while you are choosing the right vehicle.
1. Bullion- This may be coins, bars, or other physical forms of the metal. This is the only form that allows you to gain a tangible asset, one that will always have intrinsic value. For some the added security and storage concerns may be a disadvantage, but for others these are not a big deal.
2. Mining Stocks- These are shares in companies that are engaged in the development, exploration, production, and refining of the precious metal. There are some well known companies in this area, and others who may be relative newcomers may be very promising as well. Often several companies of varying sizes and histories may be chosen for diversification, so that the risks are lowered considerably.
3. Mutual Funds- This type of vehicle allows you to gain part of a completed portfolio with a single outlay of capital. Some of these specialize in the precious metal sector while others may be less specific and more rounded instead. This can allow you to obtain a wide variety of holdings for a small initial amount, with a single transaction instead of many.
4. Gold ETNs- These are exchange traded notes, and they are somewhat similar to ETFs as far as trading is concerned but they are very different in other ways. These can be very risky, and they are outside the acceptable risk level of many individuals. Your capital is used by a bank for the specified time, and when the note matures you get a return that is performance based.
5. ETFs- These are similar to mutual funds but they are traded on the major exchanges whenever trading is allowed. This eliminates some of the drawbacks that are found with regular funds, and you still get a variety of holdings for a single share price.
6. Futures- This involves a contract for a specific commodity, in this case gold. The contract will specify the exact commodity, the price, the cost of this option, and the date when the transaction will occur.
7. Accounts- These accounts may be simple or complex, and while they are based on the bullion you do not have to take possession of the ore. An area of concern is that if you do not receive the product you do not know for a fact that it actually exists. There have been scams in the past where there was not any bullion involved, and investors were simply paying money to the individual who was running the fraud.
8. Jewelry- While jewelry is a more expensive form of this bullion because of the work involved it should be considered an investment as well as an asset and decorative item. Pieces which are antique and that were inherited may have gained considerably over the years.