Just Before You Buy Your Bullion
by Arina Smith Finance 27 June 2018
You’ve probably noticed that several of your investor friends have made the move to bullion recently. It might only be a few of them that have diversified in this way, but it’s been enough to pique your interest in precious metals. Whether you want to buy your metals through an exchange-traded fund or in physical bars or coins, you should know what you’re doing before you check out a range of sale products at Golden Eagle Coin.
Bars or coins?
This really depends on what your plans are. With coins, you have a lot more flexibility when it’s sell-up time because you don’t have to sell them all at once. If you have 500 coins, you could sell just ten of them without having to cut any in half like you might with larger ingots. However, there are lots of different sizes of ingots, especially silver, but then again, you don’t get such great value for your investment if you buy lots of smaller bars.
Coins aren’t always that simple, though
Not all coins are created equal. The really high-sellers are the rare coins and these are best left up to the numismatists, or the coin collecting experts. Some coins are worth a fortune and others not much more than the spot price of the metal they’re made from, so give these a miss for now and focus on bullion. Bullion follows the market prices of its metal and if you’re already an investor then you’ll know roughly how to surf these ups and downs, although a bit of commodity-specific research won’t hurt.
What’s your budget?
This is the biggest factor in deciding what you want to invest in and how much you want to spend. Gold is expensive but relatively stable so you’ll get a return if you’re prepared to wait. Silver, on the other hand, has bigger swings but isn’t worth as much so each upswing won’t make you that big a profit compared to gold.
If you opt for gold, you need to hold onto it for a while to see the best return because you’ll be selling it for below its market price. Dealers buy just below the spot price or they wouldn’t make a profit, right? No-one else is going to buy it from you, so you have to play the game so that you both win. This means you have to wait until your gold has appreciated in value so much that selling it below current market value still nets you a decent profit.
I’m going to buy some bullion – where do I keep it?
If you have physical gold, you have it. This statement isn’t as dumb as it may look at first sight, because if your gold is held in a fund, or in an inaccessible bank vault, then you’ll have difficulties in a bank meltdown like 2008 one. If it’s accessible to you, then it’s a great form of insurance and currency if there’s an economic catastrophe.
You have to store it safely, though. This means in a secure vault or safe that only you and your immediate loved ones know about. Some investors spread their bullion between home and one or two banks so that they have access to at least some currency when the zombie apocalypse rolls around. However, storing bullion at home will bump up your home insurance premiums, so be prepared for that, as well as the hordes of undead…