Bullion Stock
Gold bullion has always stood tall as a solid investment without much risk of depreciation over time. Because of its stable value, bullion stocks are a great financial safety net to keep your money protected in the long run. But how exactly do you invest in bullion?
Don’t worry - we’ve got all the answers right here! In this handy guide, we’ll take you through all there is to know about investing in bullion stocks - from what these stocks actually are, to some of the best investment options out there.
So let’s get started, shall we?
What Are Bullion Stocks?
First things first, let’s take a look at what exactly bullion stocks are. Gold bullion refers to the bulk metal (aka refined gold that hasn’t yet been converted into coins, jewelry, or similar items). Bullion can also refer to silver, but from a stock market perspective you’ll typically be dealing with gold.
Bullion stocks involve trading gold and silver. This can either be done over the counter, or through online trading. With bullion stocks, you aren’t simply buying stocks in gold mining companies or gold commodities (such as through exchange-traded funds, or ETFs). Instead, you’re buying the physical bullion itself.
Investing in bullion is, for almost all intents and purposes, the same as investing in other types of gold stocks. The main differences here are that you’re buying the physical bullion and not merely a representation of it on the stock market. This makes your investment a tangible one - and because gold isn’t an unlimited commodity, the price will stay far more stable than other stocks on the market, and its value may even increase when other stocks fall.
Part of the appeal of bullion over other forms of gold stocks is its longevity. Because gold is finite and maintains a fairly stable value over time, investing in bullion will give your investment far more security.
You’re unlikely to see any massive returns by investing in bullion, especially in the short term (gold value fluctuates more in the short term than the long run). However, it acts as more of a financial safety net that gives you some protection against inflation and plummeting values that affect other sorts of investments.
How Do You Invest In Bullion?
So now that you know a bit more about what bullion stocks are, let’s take a closer look at how you can actually invest in them.
There are several options when it comes to buying bullion stocks. The easiest way to buy bullion stocks is through online dealers. In-person bullion markets are fairly sparse, so doing your trading online is a much easier alternative. Online markets such as JM Bullion, Money Metals Exchange, and APMEX are all reputable dealers that offer various forms of bullion such as bars and coins.
Some pawn shops also sell gold, as do local dealers and collectors. Keep an eye out for gold vendors in your local area, as you might be able to get a good deal on your bullion. You should also check the value of gold before you buy to make sure you aren’t being cheated out of your money.
Risks Of Gold Bullion Investments
While bullion may be fairly secure compared to other forms of investment, there are still some risks to buying and selling it. Despite its stable value in the long run, there can still be dips in the market that negatively affect the bullion’s value. Like with any other type of stock and investment, you can never be 100% certain that it won’t drop in value over time; however, this is far less likely to happen when it comes to bullion.
Selling your gold can also be tricky. Many places won’t pay full market value for bullion, especially if you’re in a rush to sell, and you’ll be left having to pick and choose the best selling option.
One of the greatest strengths of bullion compared to most stocks - its physical form - is also one of its biggest weaknesses. Because bullion stock is held in its physical form (whether that’s bars, coins, or derivatives), you have to worry about it being stolen.
In order to protect your bullion stocks, you’ll need to make sure it’s properly safe and secure; depending on how you do this, you might need to pay a hefty sum just to make sure your gold is safeguarded. You can also get insurance for your investment, but this is another additional cost.
Final Thoughts
While there is some level of risk involved in holding physical gold, bullion stocks are still a great investment with many clear benefits.
Investing in gold may not see high returns, but as a hedge against inflation bullion, is unmatched. If you’re in a position where you can protect your bullion stocks, then it’s a sound investment that will keep your money safe and stand the test of time.