How Do I Buy Gold?

The growing number of Americans becoming more money conscious and asking the question how do I buy gold, the wealth of information available to investors today has kept up with the growing demand for gold, making the process of purchasing gold much easier today.

One factor you will want to consider before making a gold purchase is what level of liquidity you want to own. There are many ways to acquire gold and many forms, some of these forms include coins, bars, or ETF’s. Each of these different forms is going have a different level of liquidity and differ in the way they are exchanged.

To answer the question how do I buy gold in the most simple and basic form is to invest in gold. There are several reasons why an investment in gold coins is most advantageous to you over the other forms of gold investments. One of the most advantageous things about gold coins is that you can easily liquidate the value of the commodity at any time. Because gold can be melted down to its purest form and weighed against its market value, the shape or form of the coin does not bear any consequences to the investor.

A lot of investors are attracted to gold bullion bars because of their larger weight and volume over coins. Bullion bars can be held and stored by the owner but are most often times held in escrow due to its high value. Gold bullion bars can be melted down into its purest form just like coins can, however you run the risk of obtaining gold that is not 100% pure and therefore contains traces of other elements.

Another way of buying gold is through Exchange Traded Funds (ETF’s) but this form of gold investment is a little more involved than the other two ways we already talked about. Owning gold through an ETF is a fairly new way of owning gold but is similar to the others in that it is held in escrow. ETF’s are similar to government bonds in that they are a certificate that signifies an equal amount of gold. Banks that issue these certificates will later buy them back at the current market price.

Each investment option has some intangibles, especially when an individual is acquiring about buying gold. Examples would include, when buying coins that the edges have not been filed down and that the coin weighs the correct amount. With bullion bars you will want to make sure that the weight and inside samples of the bar are tested for absolute purity. A broker’s fee is usually required with a purchase of an ETF and it is not as easy to liquidate as coins.

Probably the best answer to how do I buy gold would be to find a reputable dealer who can help you along the way and deter you from any problems that come with purchasing gold coins, bars and ETF’s. 

• American Silver Eagle Coin

Diversifying Your Investment Portfolio

One of the first things that experts in precious metals recommend when starting out a portfolio is to diversify it and to divide it up into three parts.

First Part: Inexpensive Precious Metals

The philosophy is simple. Gold is not an inexpensive metal, especially when it sits around $1700 per-ounce, however owning inexpensive gold is recommended. Inexpensive gold might include Swiss or French Gold 20 Francs. Both of these coins weigh .2074 and typically sell per-ounce. They sell for around the same price as a 1oz American Gold Eagle and a Gold Canadian Maple Leaf. A good silver option would be “junk silver bags,” which are relatively easy to store and are highly liquid, making them a great addition to a precious metal portfolio.

Second Part: Semi-Numismatic Precious Metals

The next portion of your portfolio should include semi-numismatic coins. “Semi-numismatic” are coins that are a cross between bullion and numismatic. They are collectable but also have worth due to their inherent gold content. A down side to these coins is they carry a pretty hefty premium, there bullion value follows the spot price of the metal it contains. Because semi-numismatic coins contain value in their rarity they are unaffected by price swings when the spot goes up and down. These coins are not too rare to where you would have to break your pocket book to purchase them. Semi-numismatic coins make a great addition to a portfolio because they offer a hedge against quick market turns and increase the value of your portfolio as the market value of the precious metal increases.

Third Part: Numismatic Precious Metals and Rare Coins

The last form of precious metal that is recommend to add to your portfolio is rare coins. These coins provide great potential for both investors and collectors alike. These coins can fetch a price anywhere between $5,000 and $350,000 per-coin. Within the last five to ten years the most profit has come from investing in rare coins. There are a number of coins that fall into the rare coin category and rather than searching online or in magazines to find out which coins to purchase, it is better to consult with a numismatic expert to ensure the right purchase that is most advantageous to your personal goals and objectives. Something to consider is that when you are starting out with building your portfolio there is a huge difference in purchasing rare coins for collection purposes and purchasing rare coins for the purpose of investing. This is why consulting with a professional can be of great help.

Advice on Investing in Gold

Those just starting out with investing in gold often times need a little bit of advice when they first get started. Precious metal experts are the first people you should turn to when looking for answers. You can find lists of top experts on many online websites. Make sure that the advice that is given to you by the dealer is of solid value and that other customers that have done business with them can attest to it.

Those new to investing generally have a variety of questions and one of the most common questions is, when is the right time to purchase gold? Many investors would answer this question by saying, you should purchase gold when it is needed. A good way to look at owning gold is to see it as wealth insurance. One of the main focuses of buying gold should be to create a well-diversified portfolio that will protect your overall wealth.

A good majority of financial experts would recommend allocating at least 10 percent of your assets into gold. Gold is a great way to protect yourself from inflation. Gold can be purchased either in the physical form or in exchange funds. A few of the most popular tangible pieces are the American Gold Eagle, Canadian Maple Leaf, and the South African Krugerrand. Those new to this field should find a reputable dealer to work with that can help guide you in making the right purchase for your specific needs.

These coins are deemed as great investment choices by many experts because they typically outperform other pieces. Investing in gold can outperform real estate and stocks and does not involve annual fees.

Many experts would also steer you in the direction of purchasing the physical tangible form of gold such as coins or bars rather than exchange funds which is actually a paper asset that says you own gold but it is not actually the physical form. What you actually own is a percentage of the business, which means if it goes out of business your money just went down the drain.

This is why owning physical gold is a better choice. Gold has intrinsic value and its value increases when the economy is struggling. According to experts the demand for gold is going to continue to increase, which also increases its value.

Investors can purchase numismatic gold coins, bullion coins, bullion bars or rounds. It is a good idea to seek out a professional who can help guide you in making investment decisions that will create a stable portfolio.