If you’re thinking about investing in a precious metal like gold or silver, you’ll have plenty of options for getting started.
These types of alternative investments are growing more popular today, as Americans grapple with an uncertain economic outlook and nagging inflation. By investing in a variety of assets, like precious metals alongside stocks and bonds, investors can diversify their portfolios and build a buffer against economic headwinds. Potentially, it can also allow for new ways to make money.
But how do you actually invest in precious metals like gold and silver? While investing in gold and silver can be a little bit more complex than publicly traded stocks, given the variety of ways to buy them, you don’t have to literally mine for gold to reap the potential benefits. There are several ways to gain exposure to gold and silver in your investment portfolio.
If you’re considering investing in gold, learn more by requesting a free information kit.
How to buy gold and silver
If you want to buy gold or silver to add to your investment strategy, here are a few options:
Gold or silver IRAs
If you want to invest in physical gold or silver bullion in a retirement-friendly account, you can do so by opening a gold IRA (individual retirement account) or a silver IRA. These are self-directed IRAs that allow you to purchase physical gold, silver or other assets that qualify for the tax advantages of a regular IRA.
What’s more, you probably don’t have to open separate accounts if you want to buy both types of metals, and the bullion can be held in a depository.
Not all financial services companies offer IRAs in which you can buy physical gold or silver. So even if you have an existing IRA, you may need to open another one. Otherwise, you might instead invest in assets like gold ETFs through your regular IRA, rather than physical gold. Keep in mind though, speculating on precious metals can be risky, especially as you near retirement.
Fees are also generally higher for specialized IRAs compared with regular IRAs. A custodian for your account might charge a few hundred dollars per year in administration fees, depending on the bullion value in your account. However, fees can differ depending on what you ultimately invest in within an IRA, similar to how mutual funds carry annual management fees. Fees for gold IRAs and silver IRAs can vary, based on factors such as if the provider charges separate trading fees.
A gold professional can provide further context and answer any questions about gold IRAs you may have.
Gold or silver ETFs
If you’re already familiar with traditional investing, one of the easiest ways to buy gold or silver is through exchange-traded funds (ETFs). Gold ETFs and silver ETFs essentially trade like regular stocks through your stock brokerage.
The ETF provider typically holds physical gold or silver bullion, and the value of those precious metals is reflected in the ETF’s share price. This method also allows you to avoid cost of storing physical gold yourself.
The ETF provider may charge a small annual fee to manage the fund. Gold ETFs are generally in the ballpark of 0.20-0.40% of assets, while silver ETF fees may run slightly higher.
Gold or silver mining stocks
Another way to invest in gold or silver is to get exposure via stock in mining companies. This is more of an indirect investment. In theory, if precious metals prices go up, then companies that mine those metals would also increase in value. But a number of additional factors can go into stock prices, depending on how these companies operate.
You can buy stock in specific mining companies, much as you would trade tech stocks, for instance. Or, you can buy an ETF that invests in a variety of gold or silver mining companies (or perhaps both). Fees for mining ETFs tend to be a bit higher than bullion ETFs.
Explore your gold-buying options now by speaking with an expert. You can also use the table below to compare providers.
Physical gold or silver
Another option for investing in gold or silver is buying physical bullion. This includes gold bars and gold coins or silver bars and coins. Bars and coins can sometimes have designs or images on them, for which they may be considered collectibles.
Some companies sell physical gold and silver online and ship the bullion to you. However, this may be more expensive than other forms of buying precious metals. The prices of physical gold and silver for purchase may be significantly higher than the current trading price, or spot price, of the commodities.
After purchasing, you must also figure out how to safely store the bullion, such as in a safe in your home or at a depository. You can also find some physical stores that buy and sell gold and silver, but you also will often pay a premium there.
The bottom line
Buying alternative assets like precious metals can help you withstand economic fluctuations over time. There are many ways to buy gold and silver, so consider what your goal is with these investments before picking a path. If you like the idea of physically owning gold or silver coins, for example, then you might go down that route, but if you prefer the liquidity and relative ease of trading stocks, then you might buy an ETF or shares of mining companies.
Consider consulting with a financial advisor or trusted professional to see what’s right for you. Learn more now!