Investing in Gold: A Comprehensive Guide

With the volatile nature of the global markets, many investors are turning to gold as a safe haven for their investments. Gold has been used as money for centuries and is seen by many as a trusted and reliable asset. In this blog post, we’ll explore why investing in gold can be beneficial, what types of gold you can invest in, and how to get started.

 

Benefits of Gold Investing

 

Gold is often viewed as a safer investment than stocks or bonds because it is not subject to the same levels of volatility that other traditional investments are. This means that your investment portfolio won’t suffer when the markets take a downturn — instead, it will remain stable and possibly even increase in value. Additionally, gold does not generate taxable income, which makes it an attractive option for investors looking to minimize their tax exposure.

 

Types of Gold Investments

 

The most popular form of gold investing is buying physical gold coins or bars. These items can be purchased from banks or online dealers and stored at home or in a safety deposit box at your local bank. Another option is to purchase shares in a gold exchange-traded fund (ETF). This type of fund tracks the price of gold without purchasing any physical metal; instead, you buy shares that represent ownership in the fund itself. Finally, there are also futures contracts available on commodities exchanges that allow you to speculate on the future price of gold without actually buying any physical metal.

 

Getting Started with Gold Investing

 

Before making any investments, it’s important to do your research and understand all the aspects involved in investing in gold. The first step is to determine what type of investment best suits your needs — whether that’s buying physical coins or bars, purchasing shares in an ETF, or trading futures contracts on an exchange. Once you have decided which option is right for you, it’s time to start researching reputable dealers who offer competitive prices on quality products. Finally, make sure you diversify your portfolio so that you don’t put all your eggs into one basket — this way if one type of investment doesn’t perform well then another may still provide returns for you over time.

Investing in gold can be a great way to diversify your portfolio and protect yourself from market volatility. There are several different ways to invest in gold — from buying physical coins or bars to purchasing shares in an ETF — so make sure you do your research and understand all the options available before making any decisions about where to invest your money. With careful planning and research, investing in gold can be a wise decision for both novice and experienced investors alike.

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by Rachel Buscall

by Rachel Buscall

Co-Founder & Managing Director at New Capital Link. Having started her career in the financial sector, Rachel demonstrated a natural flair for entrepreneurship.

New Capital Link

Alternative investment specialists offering structured opportunities across the UK & Overseas.

New Capital Link is a boutique London-based introducer that offers unique UK & global investment opportunities worldwide.

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Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be very complex and high risk.

What are the key risks?

1. You could lose all the money you invest

If the business offering this investment fails, there is a high risk that you will lose all your money. Businesses like this often fail as they usually use risky investment strategies. 

Advertised rates of return aren’t guaranteed. This is not a savings account. If the issuer doesn’t pay you back as agreed, you could earn less money than expected or nothing at all. A higher advertised rate of return means a higher risk of losing your money. If it looks too good to be true, it probably is.

These investments are sometimes held in an Innovative Finance ISA (IFISA). While any potential gains from your investment will be tax free, you can still lose all your money. An IFISA does not reduce the risk of the investment or protect you from losses.

2. You are unlikely to be protected if something goes wrong

The business offering this investment is not regulated by the FCA. Protection from the Financial Services Compensation Scheme (FSCS) only considers claims against failed regulated firms. Learn more about FSCS protection here. https://www.fscs.org.uk/what-we-cover/investments/ or

Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here. https://www.fscs.org.uk/check/investment-protection-checker/

The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm or Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here. https://www.financial-ombudsman.org.uk/consumers

3. You are unlikely to get your money back quickly

This type of business could face cash-flow problems that delay interest payments. It could also fail altogether and be unable to repay investors their money. 

You are unlikely to be able to cash in your investment early by selling it. You are usually locked in until the business has paid you back over the period agreed. In the rare circumstances where it is possible to sell your investment in a ‘secondary market’, you may not find a buyer at the price you are willing to sell.

4. This is a complex investment

This investment has a complex structure based on other risky investments. A business that raises money like this lends it to, or invests it in, other businesses or property. This makes it difficult for the investor to know where their money is going.

This makes it difficult to predict how risky the investment is, but it will most likely be high.

You may wish to get financial advice before deciding to invest.

5. Don’t put all your eggs in one basket

Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. 

A good rule of thumb is not to invest more than 10% of your money in high-risk investments. https://www.fca.org.uk/investsmart/5-questions-ask-you-invest

If you are interested in learning more about how to protect yourself, visit the FCA’s website here: https://www.fca.org.uk/investsmart

For further information about minibonds, visit the FCA’s website here.https://www.fca.org.uk/consumers/mini-bonds