Why Small Businesses Should Consider an Investment in Gold

Just as with a range of other investments, gold bullion tends to fluctuate in value. However, you don’t get dividend payments or interest when investing in gold. goldYet, there are a few good reasons why a small business should consider investing in precious metals, as we outline below.

The Best Ways for a Small Business to Invest in Gold

Buy the real thing

To start investing in gold, you might like to begin by buying gold jewellery. However, the best way to go is to buy gold in coins and bar form. A gold coin is made up of one ounce of gold.

You can store your gold coins in a safe deposit box or vault, but whichever you prefer, remember that there is a fee and that fee will cover your gold investment from loss or theft.

When it comes to gold bars, keep in mind that the bar’s commission prices tend to be lower than gold coins. However, physical gold is taxed as a collectible when you want to sell it and sometimes the tax rate can be higher than the long-term capital gains you’d get with stocks.

You can search online and buy Adelaide gold now to start building your investment portfolio.

Buy Gold Funds

If you’re not particularly interested in buying gold bars and coins, you could consider exchange-traded, closed-end, mutual gold funds. The funds invest in securities that are held by companies who are involved in gold activities.

Gold funds trade similarly to stocks in that you can buy and sell for small commissions. While closed-end funds do trade similarly to stocks, they are actually structured like trusts. Therefore, each share is a portion of the fund’s entire investment portfolio.

Gold funds offer an advantage over physical gold in that you pay a management fee to own them, but you don’t have to store a physical piece of gold.

Gold Mining Stocks

If you’re looking for ways to branch out, consider gold mining stocks. Their prices tend to move in the same direction as the gold prices and both financing costs and gold mine production impact the stocks.

Investors can both buy and sell the stocks via an investment brokerage account, but if you decide to hold onto the stocks for longer than a year, you might be taxed with long-term capital gains

Gold Future Contracts

You might also want to buy individual gold futures contracts. These are agreements to buy or sell pretty standard quantities of gold at a certain time, place and price. Gold futures let you either loose or gain a large amount of money when gold prices experience a small movement.

You’ll find future contracts are traded on what is called the COMEX exchange and when you either buy or sell your gold futures, you won’t pay the whole amount right away, but rather a small portion of the price when you buy with the remainder payable in full later on.

These are just 4 different ways your small business might want to consider investing in gold and diversifying your investment portfolio. Gold is a solid investment, overall, providing stability when the markets wildly fluctuate.

About Seth Ejercito

Seth Ejercito is a content editor at Media Buzzer.