When you decide you want to make investments of any kind, you need to understand having a balance between risky investments and more stable investments if you are looking to have a balanced portfolio. With the uncertainty of the global economy, not to mention a pandemic, it’s becoming more difficult than ever to find an investment strategy that seems sound. In times like this, investors should turn their strategy to gold and precious metals, and today we’ll cover how to invest in in gold for beginners.
Many investors don’t know how to invest in gold, and that’s unfortunate because it’s a solid hedge against economic conditions as gold has a perceived store value and can be a solid asset in any portfolio. We encourage you to read this entry in it’s entirety and learn the best ways to invest in gold so you can start doing so at your leisure.
Why Is Gold Valuable?
A large reason why gold has value is because historically it’s been attached to the value of the world’s currency. Hundreds of years ago, gold coins and jewelry were used in commerce as trade value and as the world moved to paper currency, they were designed with a use case to be tied to an amount of gold. However, this no longer is the case and gold has it’s uses in the world and therefore has kept it’s value as a commodity.
The demand for gold on a global scale comes mostly from jewelry. In fact, closely 50% of the world’s demand is in that sector alone, followed by another 40% that is tied to investments in physical gold, like bars, and coins. There are even rare coins, such as the gold quarter, that is popular with coin collectors. Gold is purchased by institutional investors as well as the average Joe investor, and it’s even traded in ETF’s (exchange traded funds) that purchase it for investors. The remaining gold market is largely from industrial use, such as tech and medical.
Should You Invest in Gold?
We started Cayman Financial Review to educate investors about the importance of asset diversification. Investing in gold can help you diversify your portfolio as the price of gold often strays towards the opposite of a more typical investment like a bond, mutual fund, or stock. As these assets go south, gold generally goes north. Many savvy investors allocate 5-20% of their portfolio to gold as they deem it a safer investment, and if you speak with any of the companies surveyed at Cayman Financial Review, they will normally advise you to do the same with your retirement savings. In fact, gold reached it’s highest price in 7 years in 2021.
The downside to gold investing is that it doesn’t kick off any cash flow the way a property investment or even a stock might do. However, gold is traded often, and therefore gold is a liquid asset, so if you ever need to sell your gold, you don’t have any shortage of options. When compared to other alternative investments like real estate and art, you can rest assured gold is a much more liquid asset.
Dating back through time and as the economy continues to revolutionize the world, there are few investments that have compared to gold. This precious metal’s popularity has stood up against wars, inflation, economic currency troubles, and yet has managed to gain attraction away from the mainstream challenges. When one thinks about investing in gold it’s important not to limit the options to purchasing physical gold — as in coins or bullion — but rather to invest in gold that includes buying shares in gold mining companies & stocks or gold ETFs & mutual funds, or gold futures contracts. These alternatives of gold investing can increase in value over time and maintain a level of one’s sanity whenever the economy takes a tumble.
Ways You Can Invest in Gold
For those interested in investing in physical gold, the first thought is estimating the value and whether an investor can overcome the challenges from their regular traditional online trading of stocks and bonds. Investing in physical gold requires working with dealers outside of regular brokerage houses, and more often than not, needing to pay for the gold storage and secure insurance for this type of investment. There are three main options to investing in physical gold — bullion, coins, and jewelry.
Thinking about investing in gold bullion always conjures up big shiny gold bars that are locked away in a vault for safe keeping. The most common type of gold bullion available are between one and 10-ounce bars, however, they can range from a few grams to 400 ounces, depending on what the current gold price is and the attraction to when it’s valued at over $1,000. Due to bullion’s high prices, it’s imperative to elicit a reputable dealer who will recommend insurance and a suitable storage place such as a vault of a safety deposit box. Staying up to date on the price of gold is also a good idea as a bullion investor, mainly because choosing the right time to buy and with which dealer will help an interested person base their decision on the current spot prices.
Gold Coins as an Investment
Gold coins typically weigh one or two ounces, and the collectible coins from South Africa or Canada, or even American Gold Eagles are the more widely available types that dealers will sell to an investor. Oftentimes, a dealer might even sell damaged or worn out coins, as they’re aware the value continues to increase over time. The gold coin price might not always align with the actual gold content, as those in-demand coins tend to be traded at a premium price. Pawn shops and local gold collectors might be able to provide better deals on gold coins, especially if they are a licensed and reputable dealer.
Is Gold Jewelry a Solid Investment
Wearing gold jewelry isn’t for the faint of heart, however investing in this type of bauble does come with some risks. Secondhand jewelry purchases must be authentic to maintain its value, therefore seek out a reputable dealer. Also, buying gold investment jewelry requires some sort of documentation so the purchaser can have an idea of resale value as well as the gold’s level of authenticity.
Purity of gold jewelry is essential and determining what percentage of gold is included in the piece is imperative, as the estimate is calculated based on carats — 24-carat gold being the ultimate and 100% genuine type. If the piece of gold jewelry were to be melted, it needs to be pure gold.
Purchasing Gold Stocks and Gold Mining Companies
Gold mining companies & stocks investing is a more straightforward plan than purchasing gold in its physical form. Using an already established brokerage account means that buying gold stocks & mining companies are easier to attain and allows investors to ensure the purchase is legal and through a certified broker. The more popular gold mining companies & stocks include:
- Newport Corp. – the world’s largest gold mining company
- Barrick Gold Corp. – operates in 13 countries worldwide
- Franco-Nevada Corp. – instead of owning gold mines, this company buys the rights to royalties from other gold miners
Remember though, the shares of these companies correspond to the latest gold prices, however, they are also focused on basics related to each company’s current profitability and expenses. Risks are involved with investing in individual gold companies, same as any other stock in someone’s portfolio.
Investing in Gold ETFs & Mutual Funds
Gold ETFs and mutual funds provide an investor with exposure to this precious metal’s long-term stability while offering more liquidity than physical gold and more diversification than individual gold stocks. With a wide range of various types of gold funds, check to see that industry trends are up to speed using futures or options. Index funds might be passively managed through your brokerage firm, so track the physical and gold receipts through the SPDR Gold Shares ETF. Another example to explore is VanEck Vectors Gold Miners ETF who also passively manage funds that track an underlying wealth of stocks of gold mining and refining companies.
Mutual gold funds such as Franklin Templeton’s Gold and Precious Metals Fund are solely managed by professional investors and considered very active, as these funds’ mission is to win out over the returns of passively managed index funds. In doing so, Franklin Templeton’s Gold and Precious Metals Fund come at a relatively high expense ratio compared to other mutual funds. One thing to note, these aren’t actual purchases of gold, but rather a paper investment that is probably backed by the debt or equity of gold mining companies or gold futures contracts in exchange for physical gold bullion. In simple terms, the gold mutual funds and ETFs might not align with the actual price of physical gold.
Gold Futures Contracts and Options to Invest in Gold
There are numerous ways to invest in gold, however the riskiest of them all is trading futures or options contracts, which means a form of speculative investing. The value of futures and options is based entirely on the price of an underlying asset. Investing in a futures contract is an agreement to buy or sell a security for a set price on a certain date, regardless of the current gold market conditions. An options contract, on the other hand, is an agreement that gives the investor the option to buy or sell a security if it reaches a certain price on or before a certain date.
To invest in futures or options, an individual needs an account at an online brokerage firm that provides these pathways for success. There are some online brokerages that allow for trading in these securities, however, they may require account holders to sign additional documentation that acknowledges the risk of investing in these spinoffs. But once holding an established brokerage account to trade options or futures, investors can buy and sell them directly through the platform who do charge a commission for all options and futures trades that varies based on the number of contracts bought or sold.
If investors choose to put their money in gold through options or futures contracts definitely need to monitor their holdings so they can sell, roll over, or exercise their choices before they expire sans worth. Also, each of these options includes a certain degree of leverage or debt, so investors who overuse them and experience any market losses will see their losses add up rapidly.
Final Word on Gold Investing
There’s no shortage of economic calamities or impending inflation in today’s market, so anyone worried about these cyclic events might want to invest in gold as it offers a truly safe haven. But remember, in the shorter term gold can be extremely volatile, as much as stocks over a long period of time. However, for peace of mind, it’s no surprise that gold continues to hold its value remarkably well. Check in with the brokerage firm to ensure what is happening moment-by-moment is an accurate account of the value of gold over the long haul. Streaming & royalty companies do really well when planning for a long road with gold, something to make note of and let it be.
Considering preferences and a knack for risk, choosing to invest in physical gold bullion, gold coins, gold jewelry, gold ETFs & mutual funds, gold futures contracts, or gold mining companies & stocks, it’s recommended by financial advisors that allocating more than 10% of an individual’s stock portfolio be dedicated towards gold investing. There will always be risks, just with any investments on the stock market, however, the long-term economic gold market takes patience and understanding to learn how it can be either volatile or easygoing, depending on market trends.
If investors are searching for a safer choice in the gold market, ETFs and mutual funds will surely add some of gold’s stability and sparkle to their portfolios.
Exchange-traded funds (ETFs), stock purchases in gold miners and related companies, and acquiring a physical product are all options for those interested in investing in gold. These investors have as many motivations as they do strategies for investing in the metal.
People claim that gold is a primitive relic that no longer serves as a currency in some areas. Paper cash is the preferred method of payment in today’s economy. They assert that the only advantage of gold is that it is a common component of jewelry. Others argue that gold is a valuable asset and should be included in investors’ portfolios for various factors.
Most Profitable Way of Investing In Physical Gold
Physical gold investing might be challenging for investors accustomed to internet stock and bond trading. When it comes to real gold, you’ll typically deal with dealers outside of traditional brokerages, and you’ll almost certainly be required to pay for storage and insurance. Bullion, coins, and jewelry are the three primary ways to invest in actual gold.
Bullion gold is envisioned as massive gold bars held in a vault. The most frequently encountered gold bars are 1 and 10 ounces. Gold bullion is currently trading at roughly $1,900 per ounce (September 2020). It cannot be owned, unlike stocks.
You must find a reliable dealer and pay for shipment, insurance, and storage. If you buy gold bullion, watch the price-most dealers price commodities based on current spot pricing.
Gold coin values may not necessarily reflect gold content. Collector coins can fetch a premium. In mid-September 2020, an ounce of American Gold Eagle will cost a little over $2,000. That’s nearly 5% more than similar gold bullion. Gold coins from trustworthy dealers are frequently cheaper than local collectors or pawn shops.
You can also acquire gold jewelry that has been worn and destroyed. Gold investment is riskier than pure gold. First, be wary when buying used jewelry because not all dealers are trustworthy. Authenticity is essential to you and potential buyers. Finding a reliable dealer is critical. Second, you will be paying a premium based on the jewelry designer. Amounts range from 20% to three times the metal’s raw value.
You should also be aware of the purity of the gold in your jewelry. Gold purity will be measured in karats, with 24 karats representing pure gold. That is, the melt value of your jewelry decreases when it is melting down to pure gold.
Invest in Gold by Buying Gold Miner Stock
Investing in gold mining, refining, and trading enterprises is far easier than buying gold. You can use your brokerage account to purchase gold mining stocks.
Popular stocks in this category include:
• Newmont (NEM). Newmont is the world’s largest gold mining corporation. It has mines in Africa, North and South America.
• Barrick Gold (GOLD). This gold mining behemoth has operations in 13 countries and is based in Toronto.
• Franco-Nevada (FNV). Franco Nevada has no gold mines. It instead buys royalties from other gold producers.
How to Roll Over a 401k to Gold Penalty Free?
According to the Internal Revenue Service (IRS), you have 60 days to complete your 401(k) rollover. If you withdraw funds from your old 401(k) and do not deposit them into your new account within 60 days, you will be penalized. The best approach to avoid this is to perform a straight rollover, which immediately transfers funds from one account to another.
It costs 10% if you withdraw your money before reaching the age of 59.5. Additionally, you will be taxed at your regular income tax rate if you take money out early. If you are additionally required to pay state income tax, you could spend up to 45% of your withdrawal on taxes and penalties.
Should You Make a Gold Investment?
Investing in gold may be a good idea if you’re concerned about the economy and other potential risks to your money. As volatile as stocks can be short-term, gold has held its value remarkably well over time.
Speculative gold futures and options contracts are an alternative if you want to take chances in the future. Whatever gold you choose, most financial experts advise keeping it under 10% of your whole portfolio.
In each type of investment, no matter how insignificant, there is always a certain amount of risk involved. Among precious metals, gold is not an exception. For those who are confident enough, the gold market, on the other hand, can be highly challenging. As a safe and valuable store of value, most investors look to gold ETFs and mutual funds as their safest bet.
Most investors wonder what they should invest in. Though they may choose stocks and other things, right now is the best time in history to buy gold. In fact, central banks are currently printing trillions of dollars because the economy isn’t that great. Overall, things don’t appear to be getting better.
Inflation is through the roof right now, and there’s no end in sight. Because the gold market has always been a historical hedge on inflation, some investors want to protect their savings with a shiny precious metal.
People are interested in finding appropriate gold companies to use, and they wonder, “Is Acre Gold legit?” This Acre Gold review explains everything thoroughly so that potential investors have the information they need before buying from Acre Gold. Here is what everyone needs to know:
What Is Acre Gold?
Is Acre Gold legit? To answer that question, people need to know who founded it. Overall, a small team of fintech veterans established the company. It was created to change how people purchase gold. In the past, people only had auction sites like eBay or pawnshops, both of which have questionable seller reputations.
Acre Gold works in two locations: Santa Monica, CA, and Boise, ID. With that, it’s still a new player within the gold investment industry.
The company’s idea is to offer consumers the help they require to have a straightforward and more engaging experience. With that, it ensures that the investment is safe. This company actually introduced a unique gold subscription strategy where clients can now buy a gold bar for affordable fees each month.
When the individual balance of the client reaches the price (stated by the company) for 2.5 grams of gold bullion, the company delivers the finest-quality bar discretely and right to the person’s doorstep.
Buying gold has never been easier!
Contact Information for Acre Gold
Customers can reach the company through various social media platforms, including Instagram and Facebook. They may also email email@example.com directly. There’s also an online form on the Acre Gold website. Still, the fact that there’s no phone number is a red flag that people might want to consider.
Overall, the Better Business Bureau has issued a warning that Acre Gold is not accredited. With that, the agency added that this is a subscription-based company. In a sense, clients have to use layaway practices to hold their 2.5-gram bar until the company’s monthly subscription cost meets that seller’s value.
Understanding the Spot Price from Acre Gold
There’s only one way of purchasing gold from this company, and this Acre Gold review has uncovered that feature. Investors have so many other methods of buying this precious metal. Before a person buys a gold bar, they need to understand the spot price.
Physical gold is often seen as investment insurance. Overall, the idea is to buy the material instead of having the craftsmanship level found in gold bars. When a person decides to purchase gold, it must be at the retail price that’s closest to current market prices for precious metals.
What Is a Troy Ounce?
Troy ounces are often used to show the current price of gold. In a sense, one troy ounce equals 31.103 grams. Therefore, if the markings on the precious metals are 10K, 18K, 14K, or 24K, that shows how much gold is in them. It’s impossible to work with pure gold because it is a soft metal. For that reason, gold must be mixed with other metals, and reputable goldsmiths should do this.
Here are the amounts of gold based on the markings:
- 10K – 41.6 percent gold
- 18K – 75 percent gold
- 14K – 58.3 percent gold
- 24K – 99.9 percent gold
How To Realize a Rip Off
In general, purchasing gold at its retail price is almost impossible because the customer buys through an intermediary who wants to make a profit.
Is Acre Gold legit? To know that for sure, it’s best to understand how other reputable gold retailers work. They place a premium of five percent on the spot value of physical gold, and there are usually no shipping and fulfillment fees (meaning they offer free shipping). Market prices are shown in real-time by various websites, and it’s crucial to use them before buying gold.
Acre Gold Subscription Pricing
Is Acre Gold legit? Well, it stockpiles gold and other precious metals regularly. During the last year, gold was in high demand, so the company had problems and could not acquire gold, running out of stock.
A specific price tag is put on each 2.5-gram bar of gold. If retail prices increase, the client gets a better cost. However, if prices go down, it takes longer to get the one gold bar because another payment must be made to Acre Gold.
This subscription model isn’t great, but there are the options:
$30 to $50 Monthly Packages
For people who are bargain hunters or buying gold for the first time, Acre Gold offers something decent. It has established a layaway-style program that lets customers make monthly payments of either $50 or $30. Once the account balance reaches the set cost threshold, the person receives a 2.5-gram bar delivered to their door.
$100 per Month Package
Wealthier customers can also benefit from Acre Gold’s system. They get the most recent value, which is a 5-gram or 0.1607-ounce bar manufactured using .999 fine gold. The bar promises to retain its market value forever.
The person pays the company $100 each month, which continues accumulating in the account until the balance is equal to that cost of the 5-gram bar. After this, Acre Gold ships the 5-gram gold bullion whenever the account reaches the appropriate price threshold. Any remaining amount is credited to the next 5-gram gold bullion purchase.
Charges and Fees
There is a downside here. The customer is required to cover the shipping and fulfillment fees. In addition to that, there is a one-time membership fee ($12) for each bullion and a processing fee of $3.35. If the investor chooses to close their Acre Gold account, they are charged $20 as a cancellation fee.
Special Features for Precious Metals
Each gold bullion gets packaged in a premium, soft-touch box that includes an assay card and display drawer. The person is guaranteed authenticity from Acre Gold. With that, the packaging is quite elaborate to protect the gold and certify its origin.
Every bullion features 5 grams of .9999 fine gold (2.5 grams or 0.1607 ounces). It’s delivered in a sealed and protective package, which clearly indicates its authenticity and weight with an assayer’s stamp.
Plus, the precious metals get a stamp with the Acre Gold logo, which also contains the weight and purity level. On the reverse side, the person sees the logo, as well.
When Does the Person Receive Their Physical Gold Bar?
Acre Gold delivers a 2.5-gram bullion once the person makes five payments, $50 each. However, this is subject to change if there’s a worldwide shortage and Acre Gold cannot acquire gold bars any longer.
The person receives the delivery right to their doorstep. Therefore, if the account gets opened in January, the investor should get their first gold shipment by May or June.
Reviews and Ratings
There have been many reviews that claim the sales policy for Acre Gold isn’t transparent.
With more negative reviews than positive ones, the BBB rating is quite low. With that, the customer support team receives many complaints, with hardly any positive reviews at all.
Since there are only a few ratings of positive reviews, Acre Gold is considered a near-scam investment scheme. One client actually went so far as to say that the process is a full-on scam. Though they paid a subscription every month, there’s no information offered by the retailer showing how much was sent or how much gold that bought.
When adding the membership fee to the mix, people end up spending much more for their gold than they need to. Overall, it’s best to do due diligence and consider this retailer at the person’s own discretion.
Potential Red Flags
Is Acre Gold legit? Here are a few red flags to note:
Hard to Close an Account with Acre Gold
On the BBB website, it shows one particularly disturbing complaint about Acre Gold. This person said that they had tried to close the account four different times because of unauthorized charges to their credit card.
The client couldn’t reach the customer support team of Acre Gold with the email address provided. This leads people to believe that it’s hard to cancel, even when the $20 fee is paid.
Clumsy Account Management at Acre Gold
On its Facebook account, Acre Gold states that customers receive regular updates about account statuses through email. Therefore, those who are thinking about investing with this company may want to reconsider.
In the receipt emails provided, Acre Gold includes a link called Manage Subscription. Customers are taken to the client portal, where they can manage their accounts and monitor transaction history. The company states that if the investor doesn’t get a progress email, it’s likely in the spam folder.
Lackluster Support Team at Acre Gold
Overall, part of the problem must be customer support for Acre Gold. These people are hard to reach. Some potential clients of Acre Gold chose to contact the company with a fake inquiry. Though they received a response, it wasn’t very detailed. The main frustration for many is that the price per bullion isn’t revealed. Also, the company claims that this is because of constant fluctuation for gold.
Is There a Referral Program for Acre Gold?
Some people also wonder if Acre Gold has a working referral program. Based on some reviews, it does provide one and offers incentives to clients when they refer new subscribers. These perks could be free silver, a lower membership fee, and many others.
However, it’s nearly impossible to cross-check that information with the official website. Acre Gold has dedicated one section to affiliates, but the details are lackluster at best. In a sense, the company is only offering encouragement for future partners to get referrals.
The company tells others to refer people to it, but there’s no explanation of the reasoning for it. Many negative reviews mentioned the confusion about the referral program.
Pros and Cons
- Seemingly simple signup process
- Few complaints about the gold’s quality
- Minting of gold bullion is done in Switzerland
- No gold IRA services available
- Can’t get a free gold IRA guide
- Confusing and controversial comments and reviews
- Not BBB-accredited
- More than 17 complaints in the last 12 months
- No phone number shown on the official website
- Controversial customer experiences
Conclusion – Should a Person Invest with Acre Gold or Consider Its Alternatives?
Because Acre Gold is a young dealer on the market, it’s considered strange that it has accumulated so many controversial and contradictory reviews and comments. When a person looks at the official website, there are positive comments, which make it appear favorable. However, when searching in forums and independent review sites (BBB and others), it’s clear that there are more negative comments.
Though some customers appear satisfied, there’s still the burning question: Is Acre Gold legit? Overall, the answer is no. There are just too many concerns about the reviews and the issue of how much a person pays for gold bars.
It’s the potential investor’s decision if they want to buy gold from this company, but the strong recommendation here is to do plenty of research before investing.
Clearly, this precious metal is still highly popular, and people want to buy it and store it in case their country’s currency falls or fails. This is understandable and admirable, but this Acre Gold review has shown that there are some red flags about the company.
With that, there are many other companies out there with few complaints and positive reviews. If the person’s goal is to invest in gold, it might be wise to go with one of them. Regardless, make sure to do plenty of research on the gold-buying companies out there before deciding which one to give money to.