Buying Gold Instead of Stocks

Buying Gold instead of Stocks

If you are confused as to what investment method you need to implement in order to guarantee wealth, this article may help you decide. There are many different investment vehicles and each has its own merit. Much of your decision will come from your own personality and penchant for risk. Generally speaking, the greater the risk, the greater potential return.

Stocks

There are thousands of public companies that you could choose from; it can be intimidating trying to select the "right" ones. If you like the thought of keeping your principle (your original money that you've put in) stocks may not be the best option. The prices of stocks fluctuate daily, sometimes to such a degree that it can cause you undue stress. Choose your stocks with caution, and get some professional advice before making any decisions.

Mutual Funds

Mutual funds are nothing more than several stocks grouped together. They are usually grouped according to sector and size of companies. For example, there are mid-cap engineering funds, large-cap oil funds or small-cap start up companies. The advantage of mutual funds over stocks is that the prices don’t fluctuate quite as much as individual stocks. They are considered a safer investment.

FOREX

Forex is an acronym for "Foreign Exchange." It is a worldwide exchange of foreign currencies. It is considered much more volatile, and not really a long term investment strategy; if you learn to trade FOREX, you can make a full time income; but you will need to put your money in another vehicle in order to grow your principle

Commodities

Pork bellies, sugar, coffee and oil are examples of commodities. They can be extremely volatile, and only last for a certain term, such as 6 months. There are many factors that influence the price of commodities; natural disasters are one example.

Bonds

Most of these are issued by the government, and as such, are fully guaranteed. If you invest $100, you will get your principle back in 5, 10 or 15 years, whatever the term of the bond is. You will get a nominal amount of interest; sometimes not much more than a bank account.

Gold

Gold is at an all-time high; its value increases over time, and you don't have to worry about natural disasters, or businesses going under. You can purchase real gold bars that you keep in your home, or in a safety deposit box. You can purchase gold coins as well. These take up less room in your home, but are no less valuable. If you decide to keep your gold in your home, be sure to get proper home insurance coverage. You will want to let them know you keep gold valuables in your home. Keep in mind that this may increase your insurance rate.

Be sure to investigate each investing method before you make a decision. You may want to invest in more than one option to diversify your portfolio. For example, buy some mutual funds and some gold as well. Or you may want to buy some stocks, and some gold.

Johnny Guyzer enjoys writing about the finance industry, as well as Canada life insurance policies and how to save money by comparing life quotes.