How to invest in gold is a question many inexperienced investors want answered in simple terms. There are several ways to invest in gold, and there is a best way for the average investor to do so. Here we list several alternatives, saving the best way for last find out more.


You can own the physical stuff, for example gold coins. If you invest in this way you will pay a dealer a premium, you must store it, and it is not very liquid. To sell it you need to search for a good price and then physically make delivery to the buyer.

Speculators buy and sell gold futures contracts through commodities exchanges, where the price of this precious metal is actually determined. For the average investor such speculation is not a good alternative.

Active investors simply buy gold stocks. All it takes to do this is to open an account with a discount stock broker. These stocks normally track gold prices. On a percentage basis, they usually magnify the gains and losses in gold prices. For example, if the metal price goes up 10%, the stocks may go up 20%. Active investors can invest in gold by picking specific stocks to buy, or they can invest in a basket of gold stocks by buying shares of an ETF (exchange traded fund).

Now we address how to invest in this precious metal, the best way if you are an average investor with little investing experience. Look no further than mutual funds, specialty funds. Gold funds are specialty mutual funds that hold a portfolio of gold stocks. When you buy the fund, you are invested in gold stocks that track gold prices.

Few 401(k) plans offer these as an investment option. If your retirement plan at work does not, you will need to find your own. You can trust a financial professional like a financial planner, and pay sales charges and/or other fees. Or you can save money with a little effort.

How to invest and save money: invest in no-load gold funds. These have no sales charges, and yearly expenses are normally quite reasonable. The two largest mutual fund companies in America offer no-load gold funds: Fidelity and Vanguard. You can call them toll-free, or go to their web sites. They will be more than happy to help you open an account. Once your account is open and you deposit money, you are ready to invest.

Plus, these major mutual fund families offer a wide array of other no-load mutual funds to choose from. For example, you might initially park your money in a safe money market fund. At will, you can later move part of it to stock funds and/or bond funds. You can open an individual account, joint account, or IRA account. You can rollover your retirement fund assets to a mutual fund IRA.

The more you understand how to invest, the more you will appreciate the advantages of investing in no-load mutual funds. If you want to invest in gold, look into gold funds.