Investing in Gold

Have you ever heard of gold investment?

Sure you did right?

After all it is the most sorted out investment nowadays. But does it ever occur to you what gold investment really is and how can you start invest in it?

Is it true that gold investment is the safest and best investment for you?

Well, if that question is still stuck in your head then you are lucky as I am going to answer all the myth of gold investment that keep popping in your mind.

First let us see at what does gold investment really is. Gold investment is an investment of gold in a physical form like gold bar, coins ,pendant or it can also in a form of a certificate and an account book. Now when you invest in gold it is important to know the grade of the gold. To harden the gold normally a mixture of alloy will be mix with the gold, so that is why there is so many grade of gold. Carat is the unit use to grade the gold. The 999 gold mean it is 99.9% pure gold.

Now that you already know what gold investment is, it is time to know how to invest in it. There are a few way to invest in gold. One of the direct ways is to buy it straight from jewelry shop like Habib and Poh Kong. If you get it from this shop then make sure you bring along a bodyguard for your own safety because you will walk out with a physical gold after all or bring along a liverpool fans that way you will never walk alone

The other option is to open a gold investment account with bank. There are a few banks (Maybank, Public bank, Kuwait Finance House) that already offer you to invest in gold. If you invest with bank they will likely give you a certificate or an account book. The concept is like you opening an ordinary account so it is much safer and easier. Maybank and Kuwait Finance House also offer a gold bar of certain weight if you prefer a physical gold over a gold account or gold certificate. But one thing you should keep in mind when you buy a physical gold is to make sure you have a proper place to keep it because even a scratch will bring down the value, not to mention the risk of you missing it, fire or burglary.

Other from Banks and Jewelry shops you can also get gold from a pawn shop or a private gold investment company like Public Gold. If you ask me for an advice which is the better option? I will say go for the bank as it is safer and you don’t need to worry to find a safe place to keep it.

Does it true that gold investment is the safest and best investment ?

Well to answer this question let us look at the gold price history graph .

As you can see from the graph the gold price also fluctuate like all other investment such as unit trust and share. What make it interesting to invest in gold now is that since 2001 till this day it is in a bullish phase (uptrend) and as long as the world economy is still struggling with the impact of the high inflation the gold price will goes up. How long will this bullish momentum continue is the question that we should be asking ourselves right now , because if history is to repeat itself and like all other investment gold also will have to go to the bearish (downtrend) phase.

If you look back at the graph the last bullish just last for 3 years before a bearish and a stagnant market of gold take over from 1980 to 2001. Will the next bearish be as longas before? Now do you think gold is still the safest investment? What I can say is that gold can surely give you a high return but it can’t run away from the basic rule of investment which is high risk equal to high return. I’m not trying to scare you, in fact the reason I wrote this article is to educate and encourage you to invest in gold.

In conclusion gold is still a good investment as it can stand on its own and fight inflation. Gold is also the best way to diversify your investment. As for the disadvantages of gold is that the only way to make profit is to sell it. Unlike share s or unit trust there is no bonus or dividen distibution for your gold investment.

Therefore my advice for gold investment is go for it as long as you know when to sell it. Just remember be afraid when people are greedy and be greedy when people are afraid.

* Catch my next article on gold. I will discuss about the advantages and disadvantages of investing in gold.

Sheyzal Azman
Financial Consultant
sheyzal@yahoo.com

6 commentsback to post

#1Jawaboy09/06/2011, 1:57 pm

How to buy gold? Does it count if I jewellery at Habib Jewel or something like that?

#2sheyzal09/06/2011, 3:07 pm

yup gold also count as gold investment but the value might not be as high as the 999 gold.Go to Habib and ask if they sell physical gold?I think they sell it at selected branch only.

#3Alex09/06/2011, 3:08 pm

yea. good question. does it mean we are to buy more jewellery?

#4Ahmad09/06/2011, 4:12 pm

Physical gold is hard to take care of. besides, guys dont usually wear gold what? I think better open a gold investment account But usually the first time you have to buy 10 grams minimum to open the account. that is RM 1K over

#5iMyn09/06/2011, 4:20 pm

oh ya. But banks have buying price (price that customer buys) and selling price (price that customer has to sell at) and usually selling price is much lower than buying price. Means if you buy, you usually cant sell right away because you need to wait for the selling price to raise above the price you bought the gold for…..so which is better ar???

#6sheyzal09/06/2011, 10:54 pm

Alex: If you want to invest better go to the bank. buying a gold jewellery for investment is not the best thing to do although you can do it but bare in mind the price workmanship has been include in jewellery and also we dont know how much profit the shop have made on the selling price.You might have to keep longer to get profit.so better go for the gold bar or ac

iMyn: If you buy physical gold there’s also a different on buying and selling price.that’s how they make profit.so it doesn’t make much different between gold bar and gold ac

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