With numerous international banks in distress and government bonds devaluating little by little every day, it’s no wonder that so many people are considering the gold bullion as a solid investment. Unless you’re planning to start your own business and trade actively, bullions represent your best bet of owning physical gold, diversifying your portfolio and knitting your safety net. In addition, the gold bullion can produce a generous rate of returns, provided you know how to purchase it. Let’s elaborate.

1. Spend your hard-earned cash smartly

In the eventuality that you’re new to gold investments, then it is recommended to start with the safest and most tradable form of the precious metal, namely gold coins. For the last few years, the most ‘liquid’ type of gold coins have been the 1 oz versions minted on the North American continent. The coins’ main advantage is that you’ll have no trouble putting them into your individual retirement account. Even though South Africa’s Gold Krugerrand and the Austrian Vienna Philharmonic gold coins are highly appreciated by investors worldwide, they are typically bought and sold outside the US exclusively.

2. Gold will recover in 2014

Granted, looking at its current price and realizing this is the worst annual performance in the past few years, you might feel that gold is not a smart investment for the time being. Financial analysts agree that the constant worries regarding deflation and the debt problems in weaker Euro zone economies will force the European Central Bank to loosen the current monetary policy even further. However, the effects will be minimal, especially since this is an election year. Moreover, despite the Federal Reserve’s announcements earlier this year, they will continue to pump large amounts of stimuli to keep the economy floating. The bottom line is that there are high chances the gold prices will recover in 2014.

3. Don’t keep it in the bank’s vault

Because they want to store their bullion as safe as possible, most people choose a local bank. Ironically, they forget that the reason why they decided to invest in gold bullion in the first place is to protect their finances against banks and a flawed financial system. If you intend to use the gold bullion as a safe haven, then the best approach is to store them in independent vaults, outside of the banking system.

4. Work with a reputable dealer

You’ll never be able to make wise investments or get a ROI from the transactions unless you can trust your dealer. Therefore, take the time to read reviews and find a reputable service that can meet your needs and demands.

5. Always go for allocated gold investments

If you decided to take this step, then buy gold that is allocated in your own name and hence, make sure that the bullion becomes your legal property. Since the investment implies making a bigger financial effort, you will want to keep it as a tangible asset outside the leveraged financial system and safe from the potential counterparty risks. In case you didn’t know, allocated goods are safe and yours to keep in case of insolvency or during a dispute with a financial institution.