As John Maynard Keynes put it “Gold, that barbarous relic”, however regardless of what he thought about the shiny yellow metal what is important is that the precious metal has had a terrific run over the last 100 years. In the last decade while stocks dropped into oblivion the price of gold quadrupled and since the attraction towards gold bullion does not just include traders and survivalists but also the average ordinary person who just so happens to realise the importance of having a hedge against inflation and a long term investment besides paper money in the bank. However before attempting to engage in this industry, gold bullion is not necessarily a hedge against stock crashes due to the fact that on July 1 which was a disastrous day for stocks, gold prices fell by about 3 % on the same day and thus for those who scrambled for gold that day, wound up losing even more at the end of the day.

The lesson that needs to be learned here is that gold should never be bought as a short term investment, it almost never works. The best time to buy gold is with extra money that you have and put it away and hope that you never need to sell it for a long time. That is the best way to invest in gold bullion. Another factor that eager punters must take into consideration about investing in gold or silver bullion is the fact that it does not pay out dividends; as a matter of fact it’s the other way round as there are costs involved when we store precious metals in a bullion vault. When an individual invests in a production initiative, he or she would in the end receive some portion of the profit generated from the sales of that production.

Gold bullion on the other hand does not produce anything, but the cost of storing, thus in reality it is a ‘negative yield investment’ so to speak. If we look at gold price growth on average over the past century gold’s real return (price gain less inflation) is approximately 1% a year and if we were to deduct insurance and storage the returns wind up zero. Looking at all these factors, the best way to invest in gold bullion would be to buy bullion from a reputable bullion dealership and keep iot safe at home so as to not incur costs. Buying gold in smaller denominations is actually a great way to invest as opposed to some who would say that gold bars or gold coins are not very good investments due to transaction costs and thieves and point you towards Comex exchange, the SPDR Gold Shares exchange-traded fund and a mutual fund from Vanguard.

These are not gold and if any of these companies decide to pull the plug and declare bankruptcy – you will be left with nothing but feathers in your hand. William Baldwin is one of those people who point would be investors towards these paper gold investments, which are basically nothing but paper.