5 Ways To Invest In Gold Today

January 19, 20237 min read
5 Ways To Invest In Gold Today
Share on facebookShare on TwitterShare on Linkedin

Key Takeaways

• Gold is universally recognized as a store of value

• Investors look upon it as a hedge against inflation and political upheaval, as well as an asset that enjoys a low correlation to mainstream asset classes

• However, there are a number of considerations to ponder before adding it to an investment portfolio

A favored asset from time immemorial, gold is universally recognized as a reliable store of value. The precious metal is also considered one of the safer havens for wealth during turbulent economic times. Investors often employ it as a hedge against inflation and political upheaval. Gold can also be a useful portfolio diversification tool, owing to its low correlation to mainstream asset classes. 

With that in mind, there are five primary ways to invest in gold today.  These are purchasing bullion, gold futures, exchange-traded funds (ETFs) tracking gold, gold mining stocks and mining stock ETFs. 

Purchasing Gold Bullion

Derived from the French word bouillon, which translates to “boiling” in English, the term bullion refers to any non-ferrous metal that has been heated and refined to near purity. Most often applied to precious metals such as gold and silver, the purity of bullion is determined using the fire assay technique, along with an examination using spectroscopic instruments.  The purity standard for investment quality gold bars is 99.5% (995 pure gold). The remaining .5% is typically silver or copper, which enables the smelting of the metal. 

Profiting from the ownership of gold bullion is dependent upon the movements of the commodities market for the material. Gold bullion is most commonly purchased through dealers in either one-ounce or 10-ounce bars, although it can also be had in bars as light as a few grams as well as those weighing up to 400 ounces. 

As of this writing, (November 2022) the price of an ounce of gold is roughly $1,700.  

Owning physical gold, while psychologically satisfying, does come with a couple of drawbacks — securing it and selling it. Although stocks of gold can be insured, ownership is largely based upon possession. It is pretty much gone, should it be stolen. The other issue with owning bullion is that dealers want to sell at higher prices than they buy, so getting the full value from a cache of it might be difficult to achieve should an investor need to liquidate it quickly. 

Gold Futures

Using futures to invest in gold frees investors of the need to store and secure it, while also enabling them to profit from fluctuations in its price. Another advantage of futures trading is the leverage one can apply, in that a large quantity of gold futures can be held for relatively small amounts of money. 

Because of this, profits can be made rather quickly when the market moves in an investor’s favor. Of course, the converse is true as well. Investors stand to experience significant losses should the market move counter to expectations. In that event, the investors must come up with the cash to cover their positions — or take the losses.

Gold Tracking ETFs

Perhaps the least volatile means of investing in gold, buying into a gold tracking exchange-traded fund, eliminates the need to secure a cache of the precious metal. ETFs also sidestep much of the volatility, and eliminate the margin requirements of the futures market. 

Another advantage of a gold ETF is liquidity. Shares are readily traded for the prevailing market price anytime the market is open. In that respect gold tracking ETFs behave just like publicly traded stocks. On the other hand, ETFs also track the ascents and descents of the price of gold. And, like stocks, the price of gold is subject to a degree of volatility. 

Mining Stocks

It is possible to own a piece of a gold mine. Moreover, it is a good way to benefit from increases in the price of the commodity. There are a couple of key advantages to this strategy. Profits rise along with the price of gold and production can be tailored to the price as well. In other words, miners can raise and lower production in concert with the potential for profitability. 

With that said, it is important to carefully review the fundamentals of a gold mining company before purchasing its shares. Small operations, as well as those who have yet to make a strike, are generally the riskiest investments. Moreover, as is true for all other types of publicly traded equities, the risk factor is ever present. Investors must also consider the potential volatility of the market in general. The values of mining stocks can rise and fall with the price of gold. 

Mining Stock ETFs

The advantage here is that an investor’s capital is spread across multiple operators, so if one falters the others could well pick up the slack. Moreover, these funds invest in the largest, most successful players, which further mitigates — though not eliminates— the potential for risk. 

However, any malady affecting the industry as a whole will impact mining ETFs as well. A sustained lull in the price of the commodity will drag down the value of an investment in the fund. Investors should also be careful to select funds based upon the miners they index. Some focus on established companies, while others focus on less established mining operations, which often entail more risk. 

Is Gold a Good Investment?

Generally looked upon as more of a haven than an investment per se, gold tends to be an effective hedge against inflation and economic catastrophes engendered by factors such as political unrest. The commodity’s track record for consistent returns, liquidity and typically low market correlation can also make it a useful portfolio diversification tool.

Gold has outperformed the market in certain instances, though it doesn’t always. Moreover, many types of gold-based assets can be readily converted into cash and gold tends to move opposite the market. 

On the other hand, predicting the price of gold can be difficult. It doesn’t produce cash flow, so forecasting the price of gold can be difficult. Additionally, an investor must rely on finding a buyer willing to pay more than they did to realize a profit from a sale.  Given these considerations, limiting the allocation of gold as an alternative asset to no more than 10 percent of an investment portfolio is a good idea. 

Alternative Assets and Portfolio Diversification

As mentioned above, alternative investments such as gold can be useful tools for portfolio diversification, which is generally agreed upon to be a smart investment strategy. Traditional portfolio asset allocation envisages a 60% public stock and 40% fixed income allocation. However, a more balanced 60/20/20 or 50/30/20 split, incorporating alternative assets, may make a portfolio less sensitive to public market short-term swings. 

Real estate, private equity, venture capital, digital assets, precious metals and collectibles are among the asset classes deemed “alternative investments.” Broadly speaking, such investments tend to be less connected to public equity, and thus offer potential for diversification. Of course, like traditional investments, it is important to remember that alternatives also entail a degree of risk. 

In some cases, this risk can be greater than that of traditional investments.

 This is why these asset classes were traditionally accessible only to an exclusive base of wealthy individuals and institutional investors buying in at very high minimums — often between $500,000 and $1 million.  These people were considered to be more capable of weathering losses of this magnitude, should these investments underperform.

However, Yieldstreet has opened a number of carefully curated alternative investment strategies to all investors. While the risk is still there, the company offers help in capitalizing on areas such as real estate, legal finance, art finance and structured notes — as well as a wide range of other unique alternative investments. 


Learn more about the ways Yieldstreet can help diversify and grow portfolios.

In Summary

Treating gold as a safe haven for wealth can be a good idea. However, looking at gold as an asset class for investment purposes entails a rather steep learning curve. The gold market has a number of idiosyncrasies, and owning physical gold is fraught with a number of potential liabilities. 

On the other hand, it is hard to argue with gold’s stability and lack of direct market correlation. Investors seeking to take advantage of those qualities will likely be best served by gold ETFs and mutual funds. 

All securities involve risk and may result in significant losses. Alternative investments involve specific risks that may be greater than those associated with traditional investments; are not suitable for all clients; and intended for experienced and sophisticated investors who meet specific suitability requirements and are willing to bear the high economic risks of the investment. Investments of this type may engage in speculative investment practices; carry additional risk of loss, including possibility of partial or total loss of invested capital, due to the nature and volatility of the underlying investments; and are generally considered to be illiquid due to restrictive repurchase procedures. These investments may also involve different regulatory and reporting requirements, complex tax structures, and delays in distributing important tax information.

We believe our 10 alternative asset classes, track record across 470+ investments, third party reviews, and history of innovation makes Yieldstreet “The leading platform for private market investing,” as compared to other private market investment platforms.

1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

3 "Annual interest," "Annualized Return" or "Target Returns" represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. “Term" represents the estimated term of the investment; the term of the fund is generally at the discretion of the fund’s manager, and may exceed the estimated term by a significant amount of time. Unless otherwise specified on the fund's offering page, target interest or returns are based on an analysis performed by Yieldstreet of the potential inflows and outflows related to the transactions in which the strategy or fund has engaged and/or is anticipated to engage in over the estimated term of the fund. There is no guarantee that targeted interest or returns will be realized or achieved or that an investment will be successful. Actual performance may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modelling error, or other reasons.

4 Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

5 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

6 The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments, excluding our Short Term Notes program, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including July 18th, 2022, after deduction of management fees and all other expenses charged to investments.

7 Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Alternative Income Fund before investing. The prospectus for the Yieldstreet Alternative Income Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to www.yieldstreetalternativeincomefund.com. The prospectus should be read carefully before investing in the Fund. Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

8 This tool is for informational purposes only. You should not construe any information provided here as investment advice or a recommendation, endorsement or solicitation to buy any securities offered on Yieldstreet. Yieldstreet is not a fiduciary by virtue of any person's use of or access to this tool. The information provided here is of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of this information before making any decisions based on such information.

9 Statistics as of the most recent month end.

300 Park Avenue 15th Floor, New York, NY 10022

844-943-5378

No communication by YieldStreet Inc. or any of its affiliates (collectively, “Yieldstreet™”), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice, except for specific investment advice that may be provided by YieldStreet Management, LLC pursuant to a written advisory agreement between such entity and the recipient. Nothing on this website is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Yieldstreet believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefore.

Private placement investments are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Yieldstreet or any other party, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.

Investments in private placements are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Additionally, investors may receive illiquid and/or restricted securities that may be subject to holding period requirements and/or liquidity concerns. Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

Alternative investments should only be part of your overall investment portfolio. Further, the alternative investment portion of your portfolio should include a balanced portfolio of different alternative investments.

Articles or information from third-party media outside of this domain may discuss Yieldstreet or relate to information contained herein, but Yieldstreet does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party articles, do not constitute an approval or endorsement by Yieldstreet of the linked or reproduced content.

Investing in securities (the "Securities") listed on Yieldstreet™ pose risks, including but not limited to credit risk, interest rate risk, and the risk of losing some or all of the money you invest. Before investing you should: (1) conduct your own investigation and analysis; (2) carefully consider the investment and all related charges, expenses, uncertainties and risks, including all uncertainties and risks described in offering materials; and (3) consult with your own investment, tax, financial and legal advisors. Such Securities are only suitable for accredited investors who understand and are willing and able to accept the high risks associated with private investments.

Investing in private placements requires long-term commitments, the ability to afford to lose the entire investment, and low liquidity needs. This website provides preliminary and general information about the Securities and is intended for initial reference purposes only. It does not summarize or compile all the applicable information. This website does not constitute an offer to sell or buy any securities. No offer or sale of any Securities will occur without the delivery of confidential offering materials and related documents. This information contained herein is qualified by and subject to more detailed information in the applicable offering materials. Yieldstreet™ is not registered as a broker-dealer. Yieldstreet™ does not make any representation or warranty to any prospective investor regarding the legality of an investment in any Yieldstreet Securities.

YieldStreet Inc. is the direct owner of Yieldstreet Management, LLC, which is an SEC-registered investment adviser that manages the Yieldstreet funds and provides investment advice to the Yieldstreet funds, and in certain cases, to retail investors. RealCadre LLC is also indirectly owned by Yieldstreet Inc. RealCadre LLC is a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Information on all FINRA registered broker-dealers can be found on FINRA’s BrokerCheck. Despite its affiliation with Yieldstreet Management, LLC, RealCadre LLC has no role in the investment advisory services received by YieldStreet clients or the management or distribution of the Yieldstreet funds or other securities offered on our through Yieldstreet and its personnel. RealCadre LLC does not solicit, sell, recommend, or place interests in the Yieldstreet funds.

Yieldstreet is not a bank. Certain services are offered through Plaid, Orum.io and Footprint and none of such entities is affiliated with Yieldstreet. By using the services offered by any of these entities you acknowledge and accept their respective disclosures and agreements, as applicable.

Investment advisory services are only provided to clients of YieldStreet Management, LLC, an investment advisor registered with the Securities and Exchange Commission, pursuant to a written advisory agreement.

Our site uses a third party service to match browser cookies to your mailing address. We then use another company to send special offers through the mail on our behalf. Our company never receives or stores any of this information and our third parties do not provide or sell this information to any other company or service.

Read full disclosure