Canadians looking to include gold in their investment portfolios have a lot going for them. They have easy access to gold coins and bars from all around the world, including the world-famous bullion coins produced by the Royal Canadian Mint. They can even include their gold purchases as part of their retirement savings and gain a tax advantage.
There are several ways to buy gold in Canada. Let’s take a look at how you can start investing in this unique commodity.
Buy Gold In Your RRSP Or TFSA
If you’re trying to learn how to buy gold in Canada, there’s one trick you need to know right from the start. You can buy gold in Canada as part of your RRSP or TFSA, meaning you can get a better tax deal on your investments. Here’s how it works:
- RRSP: Buy gold coins or bars as part of your RRSP, and your contribution will be deducted from your annual income, giving you a better tax return today. Ideally, you won’t cash out your gold until you’ve retired and are in a lower income bracket.
- TFSA: You don’t get a better tax return today, but you don’t pay taxes when you sell your investment later. A TFSA can be a much better plan for retirement in certain circumstances.
Open a self-directed RRSP or TFSA with your provider and start adding precious metals to your portfolio.
Buy Gold Coins And Bars
Sometimes, there’s no replacing the real thing. Gold coins and bars are the original savings account. It’s how the wealthy of the ancient world would preserve wealth against inflation and the passage of time, and it’s still a hedge used by modern central banks.
You can enjoy the long-term stability of gold as well. You can buy online or at a gold dealer near you. One thing you will have to consider is storage. Do you want to keep it at home in a hidden place or a safe? Or do you feel safer keeping it in allocated gold storage?
Exchange-Traded Funds (ETFs) are a convenient way to invest in commodities without having to actually hold onto them. Instead of owning the gold itself, you buy stocks in a fund that invests in a mix of bullion and mining stocks.
Gold ETFs mirror many of the benefits of gold bullion, such as acting as a hedge against inflation, and the minimum requirements are low. However, there is a higher third-party risk, as someone else is managing your wealth.
Finally, there’s mining stock. This is generally considered the riskiest way to invest in gold, as mining companies do not have a reputation for being well-managed or consistently profitable. Don’t expect mining stocks to perform along the same trend lines as gold itself, as mining companies can be managed very differently, and the cost of bringing gold out of the ground is significant and can vary widely by region.
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