Smart Tips Before You Buy Gold

Feb 08, 4:03 pm
Gold

So you’ve decided to invest in gold.  While there are multiple ways to get in, gold coins are one of the best choices you can make when you decide to invest and a convenient way is to buy gold online.

Not just reserved for the new investor, gold coins allow even seasoned pros diversification coupled with strong benefits.

That’s because you’re able to purchase gold coins in the open market, at the current fair value as long as you are careful (see below). There’s a low cost of entry. They are portable, and can easily be taken with you in the case of emergency, or just when you move to a new residence.  You won’t need to fill out a change of address form or any nonsense like that.

While buying coins may be easy, there are a few things you need to pay attention to.  In this article, I’ve highlighted a few of the most important tips to get the most out of your gold coin purchases.

Don’t buy fractional coins unless you have to

While you can get gold coins at fractional amounts other than 1 ounce, the premiums are higher on the buy side, and not necessarily on the sell side.

If all you can afford is a fractional weight coin (such as a half or quarter ounce) and you want to get started, then don’t worry as much about the premium.  However, if you have the resources and are going to buy an ounce or more anyway, stick with the 1-ounce coins first.  Don’t break them up just to have a variety, if you are looking to extract maximum value from your investment.

You may here that if you’re buying gold online for a survival play (as in the end of the world is coming and the entire monetary system is about to break down) then it makes sense to own fractional amount coins, so that you don’t have to give away whole ounces in order to buy goods, services, or whatever you’ll have to buy.

The truth is, you can cut just bigger coins if you need to split up the value in a survival situation. Of course, if the world doesn’t end, you’ll still have that full ounce benefit.

Collectible and rare coins are not part of a general gold investment plan

If you want something cool to look at, and you don’t care that you have a good chance to not recouping the extra premium paid, then rare or collectible coins offer something.  For most of us, though, they should be avoided.

Collectible and rare coins are great for the aesthetic value, but they won’t bump the intrinsic value in any way.  After all, when it comes down to it, an ounce is worth an ounce.

Focus on the weight of the coin first if you are buying coins foremost for an investment.  Buying rare or collectible coins is not for the faint-hearted, and it’s not easy.  You won’t know why the collectible or rare part of a coin will move one way or another, and you’ll often have to find a specialty to shop to give you full value.

Buy from a reputable coin dealer, not at places like flea markets or stores that sell gold as an afterthought

When gold started going nuts a decade or so ago, everyone decided it was a good idea to buy and sell gold in various forms such as fillings, scraps pulled from electronics, and yes, even coins.

While this may have an advantage of convenience, you’ll pay for that ease with a higher premium, and often times, obscenely high.

When you deal with a reputable coin dealer, you have the advantage of volume.  This will give you the fairest price, along with a selection of various coins to choose from.    Now I’m not necessarily talking about rare or collectible coins (see above), but if you wanted a coin from a specific country, or a specific weight if you had to go that way.

To wrap it up…

Gold coins are a smart choice if you are looking to invest in the precious metal.  Just be sure to follow the tips outlined above and you’ll be happy with your experience instead of regretting it.

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Clint Stelfox is seasoned in precious metal investment and coin collecting. You can find him leading advertising and marketing efforts for Golden Eagle Coin.

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