If you have some spare money that you are looking to invest, it can sometimes be hard to know what would make a good investment for you, especially if you are not very experienced. There are many different vehicles for investing available to people with spare capital, and all of these have different risks, as well as different potential returns.

  • Stocks and Shares – Investing in the stock market is something that is still very popular with a lot of people, but it does require some knowledge and research to get the most out of your investment.
  • Property – Property is also a very common vehicle for investment, but it can also be fairly risky, especially if your property sits empty with no tenants paying rent.
  • Precious Metals and Stones – Investing in precious metals such as Gold, as well as precious stones such as Diamonds or Sapphires, is still a very common practice today. Like all investments though they do have a level of risk.

gold_barsImage by John Louis via Flickr

When it comes to investments, the higher the risk of investment, then usually the higher potential returns that you can get. Some good advice when it comes to investing is that you should never invest more money that you can afford to lose, as you never know what it around the corner.

The Long Term Benefits of Investing in Physical Gold

Investing physical gold is something that is popular in just about every country in the world. Since 1970, the price of gold has increased substantially, with the price peaking at close to $2000 an ounce in 2011. The price has since dropped losing roughly about a third of its historic peak, that being said it is still a very popular investment for people.

Historically the price of gold does rise to new heights, before falling down again. But if you are investing for the long-term then this should not be a problem to you. You may be tempted to bail out and sell your investment when the price of gold reaches a high point. However, unless you know the market very well, you could end up going too soon and losing a significant part of your investment. If you can make an investment in gold and can leave this for a long period, then you can make a nice profit out of it.

Avoid Investing in ETFs of Paper Gold

One of the drawbacks to investing in physical gold is that you need somewhere to store the gold securely. Because of this need it will often mean having a safe deposit box in a bank, or having a safe at home, both of which can eat away at any profits you make.

For this reason, many people invest in what is called paper gold, or ETFs, which is like investing in companies that produce and mine gold and is very similar to stocks and shares. This form of investment though is a lot less stable than investing in physical gold.

You could find that if a mining company gets into trouble, the value of your paper gold becomes worthless overnight. At least when you invest in physical gold, you have something tangible to hold on to, or even sell if you need to.

Of course, there are other forms of investment which can get you a higher return for your money, but you also could end up losing money as well. If you have the cash, invest in gold and leave it in a safe deposit box for the next ten years and then see how much it is worth. It is almost guaranteed that you will make a profit, though how much all depends on the market.