With the economic state and fear of the debt limit, we are currently in even more unpredictable stock market returns, evaporating retirement nest eggs, and the weakening of the dollar. It’s more difficult than ever to find a good long-term investment. Many people only think of gold as a piece of jewelry, but buying gold as an investment can be an alternative move.
As with all types of investments, your overall success will be closely tied to how much time you’re willing to put in. You must be willing to do your homework to make the most of your investment. If you do, you may realize the outcome you were hoping for.
Take some time to learn all you can about buying and selling gold. Find out the history of trading gold and your potential as an investor. Ask questions, and don’t follow along blindly with what some ‘guru’ says to do. Knowledge is power; knowledge can also be profit.
You’ll also want to decide what type of gold to buy. For the smaller investor buying gold coins can be a good option. These coins can be bought in smaller numbers, and since they are quite small, they are easy to buy, move, and store and you may even be able to sell them for more than just the price of gold if the coin is older and rare. Instead of just selling the gold, you can get more money from the sale and value of the coin itself. When buying gold or other precious metals, I highly recommend buying rare coins graded by a third party to ensure they are authentic and in whatever condition it is graded. For more information on collection coins, visit the American Numismatic Association.
Next, you will need to locate a dealer. Make sure that it is a good reliable, and honest dealer. You will often have better and more options online, but it’s very important to only deal with someone you know and trust; sometimes, having someone local can be a great idea. That way, you can easily contact them with any questions or concerns.
If you don’t have a local dealer, it doesn’t mean you have to give up on your dream of investing in gold. You can easily find a dealer online. It’s even more important to carefully check out any dealer before you do business with them. There are many reliable and reputable dealers online. Unfortunately, there are also many scammers on the internet. If you purchase from online dealers, check their reviews and verify them with the Better Business Bureau (BBB) for any known issues.
Make sure you do searches and only deal with the most reputable dealers around.
Don’t go overboard. Only invest what you can afford. Since you can buy gold in small sizes, as small as 1/20th of an ounce, you don’t have to pay big to get your foot in the door and become an investor. Since you can buy such a small size, you can start investing with only a small amount of money.
The small size of these coins does make it easy for them to be stolen. Ensure that you keep them in a safe place (and don’t blab about all the gold you have). Get either a safe or use a safe deposit box at your bank.
Buying gold as an investment can be a great hedge when stocks are not doing as well. Gold will almost always go up in value. Just be willing to wait, and don’t expect to make a killing overnight. Gold is not something that appreciates with any major increases and has shown to be limited to around $2,000 or so an ounce in recent times. And no, gold is not a hedge against inflation but rather an asset class that may be considered in your investment planning for diversification purposes.
If you are in the metro Nashville area, feel free to contact me directly for more information. If you live outside the middle Tennessee area, seek out a qualified fee-only Registered Financial Consultant near you.
