Maximizing Gold Investment: Expert Tips for Better Returns

Gold is often considered a reliable investment option during economic uncertainty. While other assets like stocks experience high volatility, gold prices tend to increase steadily over time.

However, to maximize returns, investing in gold requires a well-planned strategy. Here are some expert tips to make gold investment more profitable:

1. Define Your Investment Goals

Before investing in gold, it's crucial to set clear objectives—whether for the short-term or long-term. This will determine the type of gold to buy, whether in the form of bars or jewelry.

Budi Rahardjo, a Financial Planner from One Shield Consulting, explains that investors should consider several factors, including financial goals, acceptable risk levels, expected returns, and understanding of the investment instrument.

Additionally, investors must determine their expected profit and risk tolerance before committing their money to gold.

"In the short term, gold prices may fluctuate, but generally, the volatility is lower than high-risk assets like stocks," Budi told CNN Indonesia.

2. Align Investment with Financial Capability

Budi advises that purchasing gold should be aligned with financial capacity. If investors have extra funds, they can buy gold in large quantities at once. However, if finances are limited, gradual purchases might be a better option.

The downside of buying gold gradually is that investors might not get the best price compared to bulk purchases.

"For example, a retiree receiving a lump sum pension fund may allocate their money into various investment instruments, including gold, as part of a diversified portfolio," he added.

3. Consider Investment Duration

Gold investment yields better returns over the long term. Hence, funds used should not come from emergency savings.

"From our observation, gold investment becomes profitable after more than 5-7 years," Budi explained.

Meanwhile, Andi Nugroho, a Financial Planner from Mitra Rencana Edukasi (MRE), notes that in some cases, gold investment can yield profits within a year.

"If the gold buyback price is higher than the purchase price, investors can sell it for short-term gains," Andi said.

4. Determine Investment Amount

For gradual gold investment, Andi suggests allocating 10% of monthly income.

"If the amount is not sufficient to buy gold immediately, it can be saved first until the required amount is met," Andi advised.

5. Choose the Right Type of Gold

The type of gold selected should match investment objectives. Andi recommends gold bars over jewelry since they retain market value better.

"Gold bars follow market prices more accurately when resold. Meanwhile, jewelry may incur melting and reprocessing fees, reducing its resale value," he concluded.

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