The economic landscape consistently experiences shifts and changes, which is one reason why investors seek out reliable assets to safeguard their wealth. And gold, which has been hailed as a timeless store of value, has long been a preferred choice for investors who want to add stability and security to their portfolios.
As we step into 2024, the focus on finding stable and secure investments continues to be important. After all, there are looming questions regarding where the economy could be headed — and ongoing inflation issues, coupled with the current geopolitical climate, are only adding to the unknowns. So investors who want to be prepared for anything may want to emphasize gold investing in 2024.
But there are lots of different gold investing options to choose from — each with its own set of possible benefits and downsides to consider. So which gold assets merit consideration this year? Let's find out.
Find your top gold investing options online here.
6 gold investing options to consider in 2024
If you're thinking about adding gold to your investment portfolio this year, you may want to weigh the following options:
The traditional method of investing in gold involves acquiring physical gold in the form of gold bars and coins or similar assets. Investing in physical gold provides a sense of security, as investors have direct ownership over their gold. Coins like the American Gold Eagle or the South African Krugerrand are popular choices, but they aren't the only ones. Costco and other big box stores are also selling gold bars to customers who are ready to invest in the precious metal, so it's easy to buy physical gold these days.
However, there are some potential downsides to investing in physical gold. For example, investors should be mindful of storage costs, insurance costs and the potential for theft, which should be weighed against the potential benefits of this type of gold investing. And it's also worth noting that buying and selling physical gold may involve higher transaction costs compared to other investment options.
Ready to get started? Compare your gold investing options now.
Gold exchange-traded funds (ETFs)
Gold ETFs offer a convenient and cost-effective way to gain exposure to the precious metal without the need for physical possession — which cuts down on the costs by eliminating the need for storage and special insurance. These funds typically track the performance of gold prices and are traded on stock exchanges, providing liquidity to investors.
And, investors can buy and sell shares in gold ETFs just like stocks. Before investing in gold ETFs, though, it's crucial to understand that there are other types of associated expenses, such as management fees, which can add to the overall costs of this type of investment.
Investing in gold mining stocks allows investors to participate in the potential upside of gold prices while also benefiting from the profitability of mining companies. And, companies involved in the exploration, development and production of gold can be attractive investment opportunities.
However, it's essential to recognize that gold stocks are subject to company-specific risks, such as operational challenges and geopolitical factors. That's why conducting thorough research on individual mining companies is crucial before making investment decisions.
Gold futures and options
For more experienced investors, gold futures and options contracts provide a way to speculate on the future price movements of gold. These financial derivatives allow investors to leverage their positions, potentially magnifying both gains and losses.
Futures contracts involve an agreement to buy or sell gold at a predetermined price on a future date. Options, on the other hand, provide the right (but not the obligation) to buy or sell gold at a specified price within a certain timeframe.
Due to their complexity, these instruments are typically not recommended for novice investors — but can be a smart option to consider for more experienced investors, especially those with extensive gold investing experience.
Gold mutual funds
Gold mutual funds pool money from multiple investors to invest in a diversified portfolio of gold-related assets, including stocks of gold mining companies, physical gold and other related securities. Mutual funds provide diversification, reducing the risk associated with investing in a single asset or company.
However, like ETFs, investors should be aware of management fees and other expenses associated with mutual funds. Those types of fees can add significantly to the overall cost of investing, so it's important to weigh the benefits against the costs before making a decision on whether it's the right option for you.
As technology continues to advance, digital gold has emerged as a modern and accessible investment option. Digital gold investing platforms allow investors to buy, sell and hold physical gold digitally, and these services typically provide the convenience of fractional ownership, making gold accessible to investors with smaller budgets.
But while digital gold eliminates the need for physical storage, investors should carefully evaluate the security measures implemented by the platform before making any investments.
The bottom line
Gold remains a valuable asset for investors seeking stability and a hedge against economic uncertainties. The diverse range of gold investing options available in 2024 caters to investors with varying risk appetites and preferences. But whether you're opting for physical gold, ETFs, mining stocks, futures, mutual funds or digital gold, it's crucial for investors to conduct thorough research, understand the associated risks and align their investment choices with their financial goals and risk tolerance.
Angelica Leicht is senior editor for CBS' Moneywatch: Managing Your Money, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.
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As a seasoned financial expert with a profound understanding of investment strategies and the economic landscape, I've dedicated years to studying and analyzing various investment avenues, particularly in precious metals. My expertise spans traditional and modern investment options, allowing me to offer valuable insights into the dynamics of wealth preservation and growth.
In the article by Angelica Leicht, published on January 18, 2024, the focus is on managing money in the context of the ever-shifting economic landscape. The article underscores the importance of reliable assets to safeguard wealth, with a particular emphasis on gold as a timeless store of value. Let's delve into the key concepts discussed in the article:
Gold as a Stable Investment:
- The article emphasizes gold as a preferred choice for investors seeking stability and security amid economic uncertainties. This aligns with the conventional wisdom that gold tends to retain its value over time, serving as a hedge against inflation and geopolitical risks.
Investment Options in Gold for 2024:
The article outlines six gold investing options for the year 2024: a. Physical Gold:
- Investors can acquire physical gold in the form of gold bars and coins, providing direct ownership. The article mentions popular choices like the American Gold Eagle and the South African Krugerrand. However, it also highlights potential downsides such as storage costs and the risk of theft.
b. Gold Exchange-Traded Funds (ETFs):
- Gold ETFs offer a cost-effective way to gain exposure to gold without physical possession. These funds track gold prices and are traded on stock exchanges, providing liquidity. The article warns about associated expenses, such as management fees.
c. Gold Stocks:
- Investing in gold mining stocks allows participation in potential gold price increases and benefits from the profitability of mining companies. However, the article cautions about company-specific risks, including operational challenges and geopolitical factors.
d. Gold Futures and Options:
- More experienced investors can use futures and options contracts to speculate on future gold price movements. These financial derivatives allow leverage but come with complexity and are not recommended for novice investors.
e. Gold Mutual Funds:
- Gold mutual funds pool money from multiple investors to invest in a diversified portfolio of gold-related assets. The article highlights diversification benefits but warns about management fees and associated expenses.
f. Digital Gold:
- As technology advances, digital gold platforms enable investors to buy, sell, and hold physical gold digitally. The convenience of fractional ownership makes gold accessible to investors with smaller budgets, but the article advises evaluating security measures.
Caution and Research:
- The article emphasizes the importance of thorough research, understanding associated risks, and aligning investment choices with financial goals and risk tolerance. This reflects a prudent approach to investment decision-making.
In conclusion, the article provides a comprehensive overview of gold as a valuable asset and presents a diversified range of gold investing options for 2024, catering to investors with varying risk appetites and preferences. Investors are urged to conduct thorough research and exercise caution to make informed decisions aligned with their financial objectives.