On of the easiest ways to improve your average returns and reduce overall risk to your portfolio is through investing in precious metals, especially gold. The gold market has taken off recently and is at its best price in decades with no sign of slowing down. The time to get in on the 21st century gold rush isn’t over. You can still tap in on this lucrative market. Gold commodity trading, whether it is in gold options, gold stocks, or gold bullion are all very lucrative investments if you do them right. However each has its specific place in an overall strategy. If you are looking for short term gains, or more long term investments, or a form of asset protection to hedge against inflation or economic collapse, you will be looking to invest in gold differently. Here are a steps that can help you get starting in investing in gold:

1. The first step in adding precious metals into your investment portfolio is to determine what percentage of your overall investment spread you want to dedicate to gold. Most investment firms advise that an optimal percentage is somewhere between 3-5%.

2. There are three main investment product options for gold investing. Several factors effect how much of if any of the three categories you want to invest in.

3.  Your first option as a gold trader is using an ETF at a broker. An ETF is a exchange traded fund. These typically come in the form of shares of a national gold fund or mutual fund. One reason why this is a popular method is that there’s no physical gold involved on your end. Its much like trading balances on a debit card. Another very attractive advantage is that you cant be taxed on “shares” of gold. Since there is no physical asset in possession there’s nothing to tax! The only downside to trading in a gold ETF is that you don’t have the immediate access to cash that might need in a pinch.

4. The other approach you can take is the old fashioned way of investing; buying gold coins or bullion and holding them in a secured location. One of the immediate advantages buying physical gold has is that you have the advantage of buying gold for less than its current market value. You can find great deals on gold coins, bars and other bullion at antique shops, coin shops. One of the oldest known and still most profitable places to buy gold’s the neighborhood pawn shop. Of course the drawback with physical gold is securing it as well as storing it. One of the advantages a ETF has over physical gold is that there’s no additional costs involved such as a safe or safe deposit box fees..

5. The final option is more rare for the casual investor but no less profitable. Your third option involves buying shares in gold mining and prospecting companies. The total value of the shares in their company run concurrently with the going price of gold futures. Typically this is a process that you’ll want to let your broker handle unless you have a better than average knowledge of gold futures.

Many investors are claiming that the time for making money in the rising costs of gold is long over. This is far from the truth. Successful gold investors know how to diversify their portfolio and use all three of these gold investments to their maximum leverage and use the precious metals market as a very nice constant return even in the most volatile of economic times. For more information on investing in and trading gold check out this link: Gold Trade 101