3 gold investing mistakes beginners should avoid this November

Before buying into gold, investors should understand which mistakes to avoid. Sven Hoppe/picture alliance via Getty Images

It's been hard to escape the gold price news in 2024. With numerous price records broken so far this year and others likely to be surpassed in the final two months, many investors now find themselves considering the benefits of a gold addition to their portfolio. Priced at just $2,063.73 per ounce on January 1, gold is now closing in on $2,800 for the same amount of the precious metal. And some experts expect that price to hit $3,000 perhaps before the year concludes.

While a rising price can deter some investors, others may want to buy in now while the price is still within reach. But gold doesn't operate in the same way other asset classes do, so it will require a more nuanced and informed approach. This is particularly true for beginners just starting in the precious metals industry. Although there are important moves to make against this rising price backdrop, there are gold investing mistakes beginners should avoid this November that are equally as important. Below, we'll detail three of them.

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3 gold investing mistakes beginners should avoid this November

Considering a move into the gold market? Be sure to avoid these three timely (but costly) beginner mistakes:

Waiting for the price to fall

Not only is gold highly unlikely to drop in price (it's up around 33% year-to-date), but it's actually more likely to tick up again. With prevalent factors like geopolitical tensions, inflation, interest rates and more, there are plenty of supporters available to drive the price of gold higher. 

Waiting, then, would be a mistake. And if you can't afford to buy in at today's prices, it may be worth considering a smaller amount of fractional gold. This will allow you to add the protection gold provides to your wider portfolio without having to overpay to get it.

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Investing in a type more suitable for veterans

Gold comes in a variety of investment types and not all — or even most — will be suitable for beginners. Gold mining stocks, for example, require more knowledge of the gold market than gold IRAs often do. Similarly, gold futures could be too risky for beginners not accustomed to the wider trends of the gold investing market. Research all of your options, but be careful with which gold type you ultimately pursue. Not each will be equally beneficial for your unique financial situation.

Overcrowding your portfolio

Gold is a valuable asset in a portfolio, regardless of whether you're a beginner or a veteran investor. But it's just one asset in a diversified portfolio that should be made up of a variety of asset classes. So dismiss the temptation to overbuy now that the price is seemingly on a never-ending rise. Instead, keep the traditional gold investing advice of a maximum of 10% of your overall portfolio in mind. By tempering your gold investment, you'll avoid overcrowding your portfolio, thus allowing more volatile income producers like stocks and bonds to better perform as intended. 

The bottom line

Beginners looking to take advantage of gold this November, and in the months to follow, should take a smart approach to the alternative asset. This involves timing it correctly (and not waiting for an ideal drop in price to act). But it also extends to investing in the right type and not overinvesting. By avoiding these simple but easy-to-make mistakes now, beginners can start their gold investing journey off on the right foot, setting themselves up for financial success both in November and in the months that follow.