Are you looking for a place to keep your wealth? Not sure where to store your money? Then you should read this. In this article, I will discuss how to buy gold and why you should start investing in Gold in Canada.
My Gold Investing Story
I started investing in Gold and Silver in 2019. Back then, I only invested in the stock market. I thought the stock market was somewhat in a bubble in 2019 (In hindsight, I should have put some money in the stock market too).
I started trying to find a different investment option, and I came across precious metals such as Gold, Silver and Copper. At that time, I had no idea how to buy gold or silver, and also didn’t know why gold and silver are a good investment. I bought some gold and silver and they have been very well even though they have fluctuated from time to time.
Why You Need to Buy Gold?
When it comes to investing, people only think of the stock and the real estate market. While they are good places to invest; however, history tells us a different story.
This is a simple price index chart that I created. This simply shows that Gold, S&P 500 and Average Detached house price in Vancouver index chart from Aug 2000 to Feb 2021. Interestingly enough Gold performed the best (Note that there was a Dotcom bubble in the stock market in 2000).
Interestingly enough, many people myself included think that the housing market in Vancouver is in a bubble and will burst soon, but the chart shows that gold has been performing better than the housing market in Vancouver!
That being said, Gold is something to hedge inflation as well as keeping and growing your wealth. Unlike paper money, the Gold supply is limited. If all the governments of the world keep printing tons of money like now, huge inflation will be inevitable in the near future.
How to Buy Gold in Canada?
There are several ways to how to buy Gold in Canada. Each way has its advantages and disadvantages.
- Physical Gold
- This is the traditional approach. Most precious metals are exempt from GST and HST, so you wouldn’t need to worry about taxes.
- Either Gold bars or Gold coins are fine. I personally prefer Gold Coins since they are easy to store. Also, you need to keep in mind that If you would like to have no issues when you trade, stick with American Eagle, Canadian Maple Leaf and South African Krugerrand. Those are the most famous manufacturers in the world.
- My favourite online gold dealer is Silver Gold Bull. They are BBB Rating A+ and have been really responsive. Note that I don’t get any money from them!
- There are three ways to invest in gold stocks. You can buy ETF, Gold mining companies and Gold Royalty stocks. If you are a beginner, Gold ETF stocks will be your best choice. SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) are the most famous ETF.
- Also, you can invest in gold mining companies such as Barrick Gold (GOLD), Newmont Corp (NEM), Agnico Eagle Mines (AEM). I personally allocated some money to some gold mining stocks since they give some good dividends.
How to Store Physical Gold?
The question you might have is how to store Gold if you buy a physical gold? Storing your gold in the security-safe deposit box in a bank is one of the easiest and hassle-free ways. Some banks offer free safe deposit boxes if you have a premium bank account like All-Inclusive Banking Plan at TD.
However, storing gold in a bank can get confiscated by the government. That’s why some people prefer to store gold at their place. You need to research and create creative hidden spaces in your home.
Gold can be wealth insurance as well as a good investment, but please keep in mind that Gold is not generating any profits. That being said, you should not allocate all your money to gold. Gold Investor E.B. Tucker suggested starting 3% of your assets allocated to gold. It could be up to 20% depending on your investing style.