Investing in gold can be a great way to diversify your portfolio and protect your wealth, as it has historically been considered a safe-haven asset. But if you are a beginner investor, it’s easy to feel confused and overwhelmed by an abundance of options or unfamiliar terminology.

Even if you're not new to investing in gold, it never hurts to brush up on your knowledge and make sure you’re making the best decisions.

In this article, we’ll cover 6 common mistakes that people make when buying gold, and provide tips to help you avoid them.

Let’s dive in!

1. Buying gold only during economic or geopolitical turmoil

One of the most crucial things to avoid when investing in gold is making decisions based on emotions, rather than a well-thought-out investment strategy.

A common mistake beginner investors make is buying physical gold only when a significant economic or geopolitical crisis erupts, which often makes the price of gold skyrocket.

However, this approach can be misguided, as it assumes that gold is solely a crisis commodity. In reality, as part of a diversified portfolio, gold can be an essential part of your long-term investment strategy, providing protection against inflation, currency fluctuations, and other uncertainties.

By only buying gold in times of crisis, you may miss out on potential gains that could have been made by investing in gold beforehand.

How to avoid it: One way to maximize the advantages of your gold investment is to buy gold and precious metals without waiting for a crisis to arise and to keep adding to your gold savings on a regular basis.

This way, you will be able to take advantage of its potential for long-term growth and benefit from cost averaging, where you invest the same amount regularly, regardless of the current price of gold.