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A Comprehensive Guide to Gold Investment Companies
By Stephanie Colestock MONEY RESEARCH COLLECTIVE
Gold can be a great investment as part of a diversified investing strategy, helping you hedge against inflation and providing your portfolio with a steady value asset. The right gold investment companies can make the process easier by facilitating the purchase, sale, and storage of your gold, depending on the types of investments you choose.
Here’s a look at what gold investment companies offer, how much they charge, and how to find the right one for you and your portfolio.
Types of gold investment companies
There are a few different types of gold investment companies, depending on how you prefer to invest and what the legal requirements are for your portfolio.
Gold IRA companies
Self-directed individual retirement accounts (SDIRAs) allow you to purchase physical precious metals as part of your retirement savings strategy, while enjoying the same tax advantages of standard IRAs. Through a gold IRA — which can be either a traditional or Roth IRA — you can invest in gold, silver, platinum, or palladium metals, then store these in an IRS-approved facility.
Gold IRA companies can walk you through this process and provide you with all of the necessary services, including:
- Setting up your gold IRA through a brokerage
- Facilitating storage of coins, bars, and bullion
- Linking you with a required custodian for the account
Precious metal dealers
Whether you’re looking to buy gold for personal ownership or for investment purposes, finding a trustworthy dealer is crucial. Dealers can help you shop around for precious metals like gold, silver, platinum, and palladium. They also allow you to compare prices on various forms and quantities, browse rare coins, and buy or sell your desired metals.
If you would like to invest in a gold IRA, the best precious metals dealers can help you find IRA-allowed metals, which are those that meet IRS standards on weight and fineness. Some companies own their own IRS-approved depository or can ship your metals directly to the facility of your choice.
Gold investment brokerage
Investors who don’t want to hold physical gold (or other precious metals) can opt to invest in gold securities, such as stocks and bonds, and gold derivatives. You can also invest in futures and options. This may mean buying individual stocks, gold exchange-traded funds (ETFs), or gold mutual funds through a gold brokerage.
Stock-based gold investments can be bought and sold like other securities, exposing you to the gold market without the hassle and risk of holding physical gold. They might be tied to the value of gold or other precious metals, could be focused on gold mining and productions, or might provide financing to fund the exploration and production of these mines (called gold streaming).
Gold mining investment firms
If you’re interested in companies involved in gold production, working with a gold mining investment firm might be the right option. These firms sell shares of stocks, ETFs, and mutual funds for companies mining precious metals around the world.
As with other gold stocks, these investments don’t involve buying physical gold. Instead, you will purchase shares of these interests just like any other stock.
Gold investment company services
Depending on the gold investment company you choose, the services available to you can run the gamut from buying and selling precious metals to consulting and storage solutions.
Purchasing services
Gold investment companies can help you buy or sell physical gold or other precious metals, either for personal use or as part of an investment portfolio. Through these companies, you can shop for metals based on price, weight, or fineness/purity. You can also look for rare coins and buy precious metals from other countries.
Most gold investment companies offer an authenticity guarantee, which provides additional proof of the legitimacy of gold. Additionally, some of these companies have their own storage facilities, but can also ship directly to you or to a storage facility of your choosing.
Storage solutions
Whether you don’t want to take on the risk of storing your own gold or need an IRS-approved depository to store your investment metals, many of the best gold investment companies provide a range of storage solutions.
You can often choose between allocated or segregated storage. Allocated storage puts your precious metals in storage with those belonging to other individuals. Segregated storage provides you with your own shelf, area, or vault where your gold and other precious metals are stored alone and can even be accessed on-demand.
Gold IRA setup and management
Some gold investment companies and brokerages can help you set up a gold IRA. They can also link you with a custodian, outline all applicable fees, process rollovers and transfers to and from the IRA, manage contributions, and help during tax time.
Consultation and advisory services
Not sure whether investing in gold is right for you? Gold investment consultants and advisors can walk you through possible investment strategies, help you understand the risks and benefits of gold investments, provide market analysis, and even offer investment advice.
How to choose a gold investment company
Once you’ve decided what kind of gold investment is right for you, it’s time to choose the company that will help guide you through the process. Here are a few things to consider when evaluating and choosing a gold investment company.
Qualifications
First, verify that the company you’re considering has the specific qualifications necessary to meet your investment needs. If you want to buy gold mining stocks, a gold storage facility probably isn’t the answer. And if you are interested in a gold IRA, you’ll need to make sure that the company you choose can not only open your account but also connect you with the mandatory custodian — and storage solutions — for your asset.
You should also consider the company’s experience within the industry. How long have they been operating and providing those services? Do they operate in your area? Do they have the necessary licensing (and are they regulated) to meet your needs?
Reputation
A gold company’s reputation can tell you a lot about how they serve customers and their trustworthiness. You can check regulatory agencies for any complaints, lawsuits, notices, or alerts. Also look at industry ratings from authorities like JD Power, consumer ratings on Better Business Bureau (BBB), and customer reviews on sites like Trustpilot.
Fees
Your expenses will vary based on how you’re investing, how much you’re investing, and how those investments need to be maintained. Make sure to get a clear picture of your expected fees, both upfront and ongoing, before choosing a gold investment company. Ask about everything from setup to storage, transaction fees, and ongoing costs like maintenance and custodianship.
Security
When investing in gold, the security of your investment (and if applicable, its storage) is paramount. Find a company that not only offers digital security measures but also guarantees the authenticity and quality of its physical assets, storage facilities, etc.
Customer service
If you have a question about your investment, you’ll want to be able to reach a representative easily and efficiently. Look at what each company offers in terms of customer support options, either in person, by phone, by live chat, or via email. Are representatives available 24/7 or does the company only allow you to send emails with a two-business-day response time?
Consider how the company is available for ongoing education. Some companies will help walk you through the gold investment process, offering a resource center, guides, and even live advisory services. Others may simply be transactional in nature. The right one for you depends on your needs and experience level.
Common mistakes when investing in gold
No matter which route or company you choose, be sure to avoid these common gold investing mistakes:
- Not doing enough research — Impulse decisions can lead to costly mistakes, such as losing your investment, paying overly expensive fees, or not meeting IRS requirements. You might overpay for gold products, especially when it comes to some companies’ premiums and other fees, or even choose a company without understanding its storage fees and security measures.
- Failing to diversify — Gold is a great addition to many investment portfolios, but no matter your goals, it’s always important to diversify. Most experts would advise that, while gold can be a key addition to your portfolio, it should not be the entirety thereof.
- Not understanding your long-term goals — All investments should be made with both your short- and long-term goals in mind. If you’re far from retirement, buying a safe haven asset like gold can help hedge against inflation, but probably isn’t going to offer the aggressive returns necessary to save for the future.
Gold investments (and other precious metals) can help all types of investors save and plan for the future while diversifying and rounding out their portfolio. These assets can even offer tax benefits in the right retirement account, but it’s important to do your due diligence before buying.
As with any investment, make sure you’re well-versed in the risks involved with gold investments and consider your personal savings goals. If you’re not sure how to best invest in gold, be sure to consult with an investment and/or tax professional in your area.