Is it Better to Buy Gold or Gold Stocks? 2 Types of Gold Investments
Gold is one of the investment instruments with many demands. The reason is simple. Its value is almost always increased. Sure, there are indeed times when the value drops down. But it is quite rare unless some conditions or situations give big impacts on the economy nationally or globally. Is it better to buy gold or gold stocks?
Anyway, in the past, gold investment was limited only in the form of physical ownership. But currently, you can choose one from 2 options: physical gold and gold-stock? So, what are the differences, and which one among them is the most profitable? Here are the explanations.
The Purchasing Value
The most visible difference mainly if you just want to start doing the investment is the purchasing value. If you are purchasing physical gold, the value is calculated based on the weight of the product. For example, you can buy gold jewelry, gold coins, or gold bars with a weight of 0.5 grams, 1, 2 grams, and so on.
On the other hand, the gold stock, known also as digital gold, can be bought with any nominal. However, there is commonly a minimum number required by the bank or other service providers. For example, you can buy the gold stock for investment at least at $5.
The Purchasing Duration
Generally, you can buy both types of gold whenever you want. However, people tend to have different habits related to purchasing time or duration. If you are interested in buying physical gold, it seems better to save up your money first. Then, you can buy a lot of physical gold at once. Why? Of course, this way is safer and more practical.
On the other hand, the gold stock tends to be more flexible. You can contact the bank or other platforms where you want to make a gold investment to ask the minimum price of gold to buy. Next, you can buy the gold as much as you want based on the money you have currently. Next week or next month, if you want to increase your stock, you can just buy it again.
The Saving Cost
The next difference is the saving cost. When you are buying physical gold for investment, it is suggested to save it in the bank. It means there is a saving cost. The cost includes extra protections from risks like loss, fire, damage, and more. How much is it? It varies depending on how many kilograms you are saving. But it can be quite expensive, up to 28% of the total savings.
Meanwhile, there is a saving cost digital gold also. But the number is lower as there is nothing to protect this way. Some banks or platforms commonly only require you balance settles that cannot be taken except you want to withdraw all your stocks.
So, which one is better? Buying the gold stock is slightly better, mainly if you see factors like the practicality and the saving cost matter. But more importantly, you should choose a type of gold that meets your needs and situations. This way, your investment will be really profitable in the end. Now, based on your opinion, is it better to buy gold or gold stocks?