Gold bars, coins and stocks: Which is the best investment?

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MoneyWatch: Managing Your Money


By Kendall Little

/ CBS News

Whether you invest in physical gold or gold stocks, the precious metal can make a good addition to your portfolio. Getty Images/iStockphoto

Investing in gold can be a good way to hedge the lasting effects of inflation today and diversify your portfolio amid a still-uncertain economic environment. But once you’ve decided to invest in the precious metal, it’s also important to choose the right way to do it.

Gold bars and coins give you direct exposure to the precious metal, while gold stocks may affect your portfolio indirectly. Plus, there are differences in how you invest, where you keep your gold, prices and more.

Before you make a decision, it can help to consider exactly how gold fits within your own investment goals. Start by exploring your options for gold investing today with a free information kit.

Gold bars and coins vs. gold stocks: How to decide

There are plenty of benefits to both physical gold and gold stocks — either can help diversify your portfolio and can serve as a long-term store of value. Nevertheless, your individual circumstances can help determine the best option for you. Here are a few details to consider:   

Gold bars and coins

Gold bars and coins may be a good option for you if you want a straightforward way to buy into gold and directly benefit from its steady value over time

To invest in gold bars or coins, you’ll first need to find a reputable dealer online or in-person. While there will be fees added on to your purchase price, it helps to know the current spot price of gold to make sure you’re getting a good deal. Physical gold — especially larger gold bars — may also require special storage and insurance, which can come at an added cost.  

If you’re investing for the long-term, physical gold can be a slightly less liquid option — though it’s still relatively easy to buy and sell the precious metal at any time.

“I recommend holding the core of one’s gold position in physical form, with coins bought from a reputable dealer or mint,” says Mel Mattison, CFP, financial services professional and consultant. Physical gold, Mattison says, can help you better avoid some of the pitfalls of panic selling and potentially hinder your portfolio’s performance.

If you’re saving for retirement, a gold IRA may be a good way to buy your gold bars or coins. This self-directed IRA has tax-advantaged retirement benefits like a regular IRA when you use it to hold certain forms of qualifying gold. You can work with a trustworthy gold investment company to buy eligible gold and find storage with an IRS-approved custodian — simplifying the process. 

Learn more about adding gold to your portfolio now with a free investors kit!

Gold stocks

If you’re looking to buy into gold and are already a seasoned stock market investor, gold stocks or gold funds may be a good option for indirect exposure to the asset.

“Certain ETFs and mutual funds mimic the price movement of gold and they are considered easy-to-invest options for many,” says Ohan Kayikchyan, CFP, founder of Ohan the Money Doctor. “Investing in gold mining companies also became a popular approach for diversification involving the precious metals industry.”

You can buy into gold ETFs or gold mining company stocks using any brokerage you would for other stock investing. Just make sure you understand any fees you might be charged or investment minimums you’ll need to meet before you buy in.

If you’re looking for the most liquidity and want to avoid storing physical gold, gold stocks or funds could be a good option. You may also choose a combination of both options — for example, if you want to incorporate gold into your retirement plan with a gold IRA but also diversify your existing investment portfolio with a gold fund that follows gold prices indirectly.

The bottom line

Investing in physical gold via gold bars or coins can be a great way to add a small amount of the precious metal to your portfolio and use it to safeguard your investments against downturns and inflation over time. If you’re looking for a tangible investment option that can offer long-term stability, this could make a good choice. 

But gold stocks (whether funds that hold physical gold or stock in gold-adjacent companies) are a popular way to invest in gold today, too — largely because they offer an easy way to buy into the asset’s value without the need to store or insure gold yourself. 

Thinking about investing in gold? Speak with a trusted advisor about your goals and begin exploring your options with a free investment guide today.

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