When buying gold there are many traps to avoid prior to spending your hard earned money. I’ve put together a list of the top ten gold investment strategies for investors who are new to the market and wish to maximize the return on their investment Auctus Metal Portfolios.
1.) The first tip and I think it’s the most important tip before buying gold is to shop around. This may sound obvious, however, there are many novice investors who are overwhelmed when buying gold and settle for the first option they can find on the internet. Make sure you do your research prior to purchasing since it could cost you thousands of dollars if fail to make the right decision.
2.) Never buy numismatic gold coins unless you’re an avid collector. Numismatic coins are collector’s coins and carry a significant cost over the spot cost of the gold. Numismatics are extremely rare coins, graded coins shipwreck coins, etc. Keep in mind that you are investing in commodities (gold) therefore you need the most gold you can for your amount of money.
3.) Make sure you buy bullion coin along with bullion bars. Gold bullion is essentially gold that is made in large quantities. It is 99.9 percent pure gold. It comes as government minted coins such as rounds, ingots and bars. Purchase gold bullion as the cost of its purchase over the price of spot is very low. For example, the gold price today is about $1100/ounce. If you were to buy a numismatic gold coin it would cost between $1,500 to $100,000 for one coin. A bullion-type coin, such as The American Gold Eagle might be $35 above the spot price. A much better deal.
4) Compare the different Gold bullion products. Usually gold bullion that is created by government mints, such as the Perth, Australia mint or U.S. mint carry a greater value than gold rounds. Gold rounds are not considered coins since they aren’t legal tender. They do not have a face value them like an U.S. gold coin does. These rounds are usually cheaper to purchase.
5) Stay clear of fool’s gold. The term “fools gold” is that is used by many to refer to those ETFs that invest in gold (Exchange Traded Funds). GLD is one such fund which you can invest in through your broker. The issue of these funds is you don’t actually hold the gold you’re investing in. They are derivatives, so you’re only exposed to gold’s price. The GLD is generally believed to not possess the gold they claim to possess because they won’t allow a third party audit of the gold they store.
6.) Beware of gold futures contracts by the COMEX (Commodities Exchange). These are just futures contracts for buying 100oz of silver per contract. When the future date arrives and the gold price has risen, you make a profit. The COMEX is also investigated for allegedly failing to pay on the delivery of gold to customers. The public is also saying that the COMEX has been using cash settlements instead of physical delivery of gold to their customers. Technically, this could be considered an infraction.
7.) diversify your possessions. Just like any investment portfolio you want to buy different types of gold. Don’t simply put all your cash into American Gold Eagles. It’s a good idea to diversify since you don’t know which coins might be worth more when you sell them.
8) Buy different denominations of gold coins. There are many silver coins for 1/10 ounces and 1/4 ounce sizes, as well as 1/2 one ounce and even 1 ounce. There are coins that are made in larger quantities of 10 oz or more. It’s important to remember that smaller denominations carry more value due to the fact that they took longer and more energy to create.
9.) Beware of putting your gold in banks’ lock boxes. It is better to find a place for your gold to be stored that is not known to anyone else than to trust that a bank will let you take your gold in the event of a bank run. Another option is a heavy safe that’s attached onto the floor.
10.) Never tell anyone that you are taking a position in the gold market. If the time comes when the price of gold goes up and experts predict will take place sooner rather than later you should ensure that your investment is not known to potential thieves.
This is by no means the most comprehensive listing of gold investing strategies, but it might assist you in the beginning of your journey to gold investment.