Investing in gold can be a smart way to diversify your portfolio and potentially achieve better returns. Gold has historically been considered a safe-haven asset, often maintaining or increasing its value during economic uncertainty, inflation, and currency volatility. Here are three smart ways to invest in gold for potentially better returns:

1. Diversify with Gold ETFs and Mutual Funds

Gold Exchange-Traded Funds (ETFs) and mutual funds offer a convenient and cost-effective way to invest in gold without the need to physically own and store it. These funds track the price of gold and are traded on stock exchanges, providing liquidity and diversification.

• Accessibility: Gold ETFs can be easily bought and sold like any other stock through a brokerage account.
• Lower Costs: Compared to owning physical gold, ETFs typically have lower storage, insurance, and transaction costs.
• Diversification: ETFs allow you to gain exposure to gold without the risks associated with individual mining companies.

For example, investors can gain exposures to both Gold ETFs and gold mining stocks which are available on SGX using cash, the Supplementary Retirement Scheme as well as Central Provident Fund (CPF) Ordinary Account and Special Account savings.

2. Consider Physical Gold: Bars, Coins, and Jewelry

Owning physical gold, such as bars, coins, or jewelry, provides a tangible asset that can act as a store of value. While this method offers a sense of security and direct ownership, it also comes with its own set of considerations.

• Tangibility: Physical gold provides the satisfaction of owning a tangible asset that you can hold and store.
• Safe Haven: During economic and political instability, physical gold is often seen as a safe-haven asset, retaining its value when other investments decline.
• Storage and Security: Storing physical gold requires secure storage facilities, such as safe deposit boxes, which can incur additional costs.
• Premiums: Buying physical gold often involves paying a premium above the spot price, which can impact your initial investment.

3. Explore Gold Mining Stocks

Investing in gold mining stocks allows you to benefit from the potential profitability of companies involved in gold exploration, mining, and production. As gold prices rise, mining company profits often increase, potentially leading to higher returns than gold itself.

• Leveraged Exposure: Gold mining stocks offer leveraged exposure to gold prices, meaning that their value can increase at a faster rate than the price of gold.
• Growth Potential: Mining companies have the potential to increase production, discover new reserves, and improve efficiency, leading to long-term growth.
• Risk Factors: Investing in mining stocks carries additional risks, such as operational challenges, political instability in mining regions, and fluctuations in the overall stock market.

Successful investing in gold mining stocks requires careful research and due diligence. Investors must evaluate each company's management track record, production costs, and growth prospects.

Important Considerations

• Risk Tolerance: Assess your risk tolerance and investment goals before investing in gold. Gold prices can be volatile in the short term, so it's important to have a long-term perspective.
• Portfolio Allocation: Experts recommend allocating 5-15% of your portfolio to gold, depending on your financial goals and risk tolerance.
• Market Monitoring: Regularly monitor gold prices and market trends to make informed investment decisions.
• Financial Advice: Consider consulting a financial advisor to determine if gold aligns with your financial goals and risk profile.