Best practices for gold beginners

If you've become interested in the benefits of gold investing this year, you're not alone. With still-elevated prices caused by inflation, uncertainty in financial markets and rising interest rates, many Americans are considering new ways to secure their portfolios today.

But like any investment, you'll make the most of gold by doing some research beforehand. Buying gold is different from other assets you likely already have in your portfolio — and it may perform differently over time, too. Making a few smart choices upfront can help you maximize your gold investment over time.

Find out how gold may benefit your portfolio with a free information kit today.

Best practices for gold beginners

If you're just getting started investing in gold, here are a few ways you can get the most from your investment while protecting your portfolio:

Choose the right allocation

One of the most important things to consider before is how much of your total investments you want to dedicate to the precious metal. Experts typically recommend keeping your allocation small and investing no more than 5% or 10% of your overall portfolio. 

That's because gold can perform well as a method of diversification. Gold's price does tend to rise steadily over time, but it doesn't have the same historical growth as the stock market. Instead, its price moves independently of other markets — so it can remain steady or even rise when the stock market trends down. 

In a small allocation, gold can help keep your investments stable through recessions or market downturns, while still leaving plenty of room to grow your portfolio elsewhere. 

Before you make any changes to your plan, consider speaking with an expert, like a trusted financial advisor, who can give you specific advice on your individual situation. You can also start learning more about gold investing today with a free investors kit. 

Find a reputable seller

There are plenty of ways to invest in gold, but a common option is buying physical gold bars and coins. You may choose to buy and keep the physical gold yourself, or invest your gold for retirement through a gold IRA. 

If you do decide to invest via gold bars and coins, you'll want to make sure you find a reputable, trustworthy gold dealer. Research details about the gold you're looking for beforehand, including purity, weight or any specific coins you may be seeking. You should also look out for red flags that a seller may not have your best interests in mind — pressuring you to buy, promising unrealistic returns or a lack of customer reviews online could all be worth noting. 

And while you should expect a markup when you buy gold, look into the current price per ounce so you can determine whether you're being quoted a competitive price.

Don't forget to consider other gold investment options, too. If you'd prefer to invest in the precious metal indirectly through the stock market, for example, you may want to buy shares in a gold ETF or mutual fund — and can do so directly through your brokerage. This can help you gain exposure to gold without having to physically own any of the metal. 

Invest for the long term

Any beginner to gold investing should know that gold can have the most positive impact on your portfolio when you have a long investment horizon ahead. 

While gold's value does tend to rise over time, it also has regular fluctuations that can be risky for short-term investors. Plus, gold can be appealing for its ability to hedge inflation and withstand market changes. When you buy into gold for the long-term, you can potentially reap these benefits over the course of several market cycles — and get more value from your investment.

Find out more about how gold can fit within your portfolio with a free investment guide here.

The bottom line

If you're thinking about adding gold to your portfolio, you'll benefit from learning about the characteristics that make it a unique investment type. Any beginner gold investor can benefit from choosing the right allocation, picking a trustworthy seller and investing for the long term. When you follow these best practices, you can maximize your gold investment alongside the rest of your portfolio. 

Before you invest in gold, consider speaking with a trusted advisor who can help you determine the best path for your overall investment plan. And start learning more about gold investing today with a free information kit.