Wednesday, August 17, 2022

Investing In Gold: Mistakes You Should Avoid

Investing In Gold: Mistakes You Should Avoid

No doubt, all investments have some risks associated with them. As such, whether you would like to start investing in gold or not, is a decision that you can make after considering how risk averse you are. As a matter of fact, a big number of investors worldwide believe that buying gold is the safest option above and over other conventional investments like shares. With the current turbulence in the global economic environment, investing in gold is the less risky adventure that anyone investor can get into.

However, that doesn’t mean that there aren’t any risks associated with this kind of investment

The truth of the matter is that you can minimize such risks by avoiding certain mistakes that adroit investors usually make. To begin with, never invest in gold in the short term. Focus on the long term, because there are higher chances that you will a decent return when you do that. Although it is true that the value of gold keeps growing, it has also often been associated with short-term price fluctuations. Put differently, if you buy gold today with the intention of liquidating your investment in a matter of weeks, you may sell it for less than you have bought it. Investing in gold requires time and patience.

Avoid investing in gold in the form of gold ETFs

When investing in gold, one of the mistakes that adroit investors often make is the thinking that buying gold ETF is better than buying physical gold. One thing you should know is that investing in gold (physical gold) is like holding your wealth in your hands. Unlike physical gold, gold ETFs are a kind of financial products that are associated with counterparty risks. Counterparty risks is the possibility of the other party dishonoring the agreement or engage in any default of any kind. Furthermore, gold ETFs are usually linked to a bank. In the event that a bank becomes bankrupt, this will affect the company’s stock negatively.

Finally, make sure you buy gold from a reliable source

As a rule, a gold seller should be able to operate a physical shop from where they make all the sales. Investing in gold is more convenient when you are able to “see” what you are about to buy. It is for this reason that we always advice our clients to come and buy from our physical locations in Nairobi, Kampala, Kigali, and Kinshasa. We sell gold bars, gold ingots and high quality raw gold. For more details about investing in gold from the DRC, please feel free to consult us now.

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