Factors to Keep in Mind When Adding Gold Bullion to Your Superannuation Portfolio

Factors to Keep in Mind When Adding Gold Bullion to Your Superannuation Portfolio

Gold bullions are a popular investment choice among employees trying to diversify their superannuation fund. Before deciding to add gold bullions to your portfolio, you may want to verify if your SMSF has that option. Adding gold bullions to your portfolio can improve the possibility of returns and reduce risk. 

Sellers like Gold Bullion Australia have been in existence since 1980 and have been gaining popularity since the onset of Covid-19, especially since gold has a lower correlation to equity. Balancing your portfolio precious metals along with your equity-aligned options may give you the best result in terms of both risks and return. 

Understand How Bullion Works

Bullions are gold coins, bars, or blocks that you can purchase from authentic suppliers as sources of investment. Unlike Jewellery, bullions have lower labour charges and service charges. Some bullion coins have a numeric value imprinted on them and may come at a higher price. 

The pricing is generally based on the weight of the gold bullion and the quality of gold used. Gold is one of those rare investment options that hardly ever witness a lower price fluctuation because gold prices have only seen a steady rise over the years.

Gold Bullions as an Investment Option

The cost of bullion would depend mainly on the present market value of gold. For investment purposes, bullion works primarily like physical cash. Investors can make profits by purchasing the bullions when prices are low and selling at high prices. When bullion is added to SMSF, they are usually channelled into another investment option or fund. The returns from the fund are compounded to your SMSF. 

Buy From an Approved Seller

When buying bullions for your investment portfolio, you may want to ensure you are buying from an authentic seller like Gold Bullion Australia. The quality of gold used plays a vital role, so it’s recommended you only buy from reputed sellers who provide quality assurance certificates, warranties, and guarantees. 

The Volume of Your Investment Matters

Before investing in bullions, you may want to decide how much of your SMSF should be reserved for them. While Bullions are generally one of the safest investment options in terms of risk (since gold prices rarely decline), equity options may yield higher returns from the market. Bullions do offer significant liquidity. So if liquidity matters more to you than short-term returns, you may want to add more bullions to your fund.

Most Bullion Dealers Work for a 2% to 4% Mark-Up

A few major players dominate the bullion market in Australia. Further, bullions are high-value metals. Authentic sellers don’t charge more than a 4% margin on their products. This is something you may want to keep in mind when purchasing bullions for your investment portfolio since counterfeit dealers may charge higher margins.

Bullions Could Make Your Fund More Stable

Gold Bullions add stability and steady returns to your SMSF. Gold has not seen a decline in value even with rising demand for new investment options like Bitcoins. You can sell bullions with minimal difficulty and are an excellent option for any investor looking for highly liquid options.