Do you want to make money investing in gold ETF online but don’t know how? If YES, here is a complete guide on how to invest in gold ETF profitably as a beginner.
What is a Gold ETF?
Gold Exchange Trade Fund is a commodity trading that consists on just the gold asset. In a lay man’s language, it has to do with investing in gold producing companies through exchange trust funds. This is just the same with the offline business of buying and selling physical gold bar but with Exchange trust fund, you do not own the physical gold bar because even when you want to cash out or redeem your gold ETF, you will be paid with cash not gold bar.
This type of investment is very valuable and preferable to investors because of the volatile nature of the gold commodity. In this article, I am going to mention the advantages of investing in gold Exchange trust fund, what you need to start a gold Exchange trust fund investment portfolio and also how to go about investing in gold without actually buying the gold bars.
So at the end of this article, you should be able to know how to go about investing in the gold commodity without actually purchasing the gold bars.
4 Advantages of Investing In Gold Exchange Trust Fund (EFT)
- Opportunity to Accumulate Gold for Profits-: Since the gold can be bought in smaller units, you can buy them in bits and accumulate them for others in the future. For instance, you can invest in gold ETF on behalf of your children to use in the future.
- Profitable Investment-: I have mentioned this aspect above but it is worth mentioning again, you can make a massive profits from your initial investment in a short time due to the volatile nature of the gold commodity
- Easily Sold For Cash-: In the gold exchange trust fund business, you don’t need to look for a buyer to buy the gold from you, you can sale your units of gold any time in exchange for cash without paying tax on the sales.
- There Is No Theft or Damage-: In the offline business of buying and selling gold, you run the risk of loosing your gold bars to theft or damages. Also, you attract other fees you will pay for storage of the gold bars, but this is not the case if you invest in gold Exchange trade fund, since you will not be in the possession of the gold bar.
4 Things You Need to Start a Gold Exchange Trust Fund (ETF) Business
So far, I have explained the advantages of investing in a gold exchange trust fund business, I will take it a step further by explaining things you need to get started in the business.
a. Capital-: This is the number one thing you need to start your gold Exchange trust fund business. You need the capital to buy the units of gold that you will hold to be sold in the future.
b. Computer with Fast Internet-: Since the investment will be done online, you need a computer with a fast internet connection to monitor the commodity market and place your order when the market condition is okay for you.
c. A Good Commodity Broker-: You also need a good commodity broker who is very reliable on whose platform you can place the order to buy the gold commodity. The broker must have the following features:
- Ability for you to sell your gold with ease in the future when the price of gold rises.
- Ability to place instantly at your desired gold prize
- A user friendly platform
- Finally, the broker must be able to pay your cash equivalent of the gold units to your desired account after you sell it on his platform.
d. Accurate Information on Happenings In Gold Market-: Information they say is power, you need an hourly update on happenings in the gold market. This is very important because it will help you know the right time to buy gold units when the price is low and when to sell off the units you have when the price goes high. You can subscribe for a commodity news alert service that will send you email alerts or texts to your phone on prize changes in the gold market.
How to Invest In Gold Exchange Trade Fund (ETF) Online Like a Pro
I have mentioned everything you need to venture into this type of investment; it is now time to build up your gold investment portfolio.
1. Research the Commodity Market-: You don’t just jump into the commodity market to buy gold, you will end you buying at the wrong price. Since the end means of this business is to make profits, you need to carry out research on the prize of gold in the commodity market. If the price of gold is too high at the moment, you can hold off buying and continue monitoring the market until the price of gold comes down.
2. Create an Account with a Good ETF Broker and Invest-: When the price of gold comes down to the price you want, it is time to buy up the number of units you want. To do this, you need to create an account with a broker. I have mentioned the features you should look out for in a broker before buying from his platform. Log into your broker account, choose the number of units you wish to buy and make your payment.
3. Sell for Profits-: This is the last stage of the gold exchange trade fund (ETF) investment. At this stage, you have bought the number of units you wish, it is time to continue monitoring the market to get the right moment to sell and make profits.
Due to the volatile nature of the gold commodity, you need to monitor the market daily and sell off if the price is good enough for you to make massive profits. You can sell at the price and leave the money in your broker account to buy more number of units in the future.