How to Buy Gold


On August 10th Bridgewater Associates founder Ray Dalio wrote a LinkedIn blog post suggesting investors should have 5-10% of their portfolio in gold due to a rise in risk in global markets. He also put his money where his mouth is as his fund took a new position in two gold ETFs. This is not a new recommendation from Dalio, whose All-Weather strategy has included a 7.5% allocation to gold for some time. As I’m writing this, gold is up 16% year to date at $1340 per ounce.

So if you wanted to follow Mr. Dalio’s advice, how would you go about it? Here are a few simple ways you can allocate to gold:

  1. Buy physical gold – probably the most exciting way to own gold is to buy the stuff itself and take it home. Obviously it’s not advisable to have large amounts of gold sitting around in your spare room, but for smaller amounts a decent safe is probably enough security. If you live in Japan you can buy gold on the high street from Tanaka Kikinzoku. Their English page is not so detailed, but it does have up to date price information.
  2. If you are planning on buying larger amounts you may want to use a service like Goldmoney where you can both purchase and securely store your gold for a fee.
  3. Buy a gold ETF – if you have a brokerage or platform account that gives you access to ETFs, this is the simplest way to get exposure to gold. SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) are two well known gold ETFs. There are also a number of gold funds out there that buy and store the physical metal – just make sure you are buying a gold bullion fund, rather than a gold (miners) stock fund, as they will not necessarily produce the same results.

If you are thinking of adding gold to your overall asset allocation I hope this helps. I would be happy to hear from anyone who has found other convenient ways of investing in gold or other precious metals.

Disclaimer: This should go without saying, but the information contained in this blog is not investment advice, or an incentive to invest, and should not be considered as such. This is for information only.



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