What Are The Ongoing Costs
There are attendant costs to physical ownership of bars and coins, including insurance and storage. ETFs and closed-end funds charge annual management fees to cover costs and provide a profit to the management company.
Its important to consider all of the initial and ongoing costs related to whether you choose to invest in coins, bars, ETFs or closed-end funds. For ETFs and closed-end funds, compare the management fees across different offerings, but also consider the differences in features and the associated risks with each offering to determine the overall value you receive.
Keep Reading Until The End Of This Article For An Insider Secret On The Market Right Now And How To Take Advantage
While its all too easy to jump headfirst into an investment nowadays without committing to due diligence, facing up to the task of educating yourself on the matter will make you a better Investor and it may just save your portfolio.
This is one article you seriously DONT want to miss!
Check it out below and let me know what you think in the comments?
Is Precious Metals a Good Investment?
Yes, investing in a precious metal like Gold in todays market is an excellent idea.
In light of COVID-19, the global economy has never seen so much cash stimulus before. While many analysts believe we are on the verge of the next Great Depression in 2020, this also reinforces the fact that the dollar may very well collapse in the next 12 months.
The Feds recent cash injection to the economy does not sit well for the greenbacks.
The collapse of the U.S. dollar will likely push gold prices to over $5,000 an ounce which means that, even at $1,400 an ounce, gold is still dirt cheap. I firmly believe every investor should own gold right now as the ultimate store of wealth that will protect hard work and savings.
Here’s the reality…
The early adopters those who wisely purchased their positions in gold before the masses come will sleep soundly at night while others fret as they watch the purchasing power of their savings evaporate like water in the Sahara.
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Store Some Of Your Gold In A Safe Jurisdiction
Because of the issues discussed above, you should store some of your gold in a safe jurisdiction where the power of politics is limited.
Switzerland is one of the safest jurisdictions because they have seven presidents and a decentralized political system. This means that the states and the municipalities generally have a lot more power to make the rules on their own levels.
Switzerland was founded on the principles of subsidiarity, meaning that if a municipality cannot solve an issue on its own level and needs the support of the state, then it can call on the state. But it never works the other way around. It has to be from the bottom up.
A centralized system with one president for 320 million Americans, on the other hand, can make the rules from the top and ignore the people because they have the power. In Switzerland, no one knows the name of the president. The Swiss people have the last say and they would never allow for confiscation, theyre not that stupid. This is a unique system that you dont find in other countries.
Liechtenstein is similar, but they have a monarch figure Prince Hans-Adam II who has veto power. However, he is a strong supporter of gold. He was involved with the Center for Austrian Economics and wrote the book, The State in the Third Millennium, where he promotes secession rights down to the municipality level, as well as sound money principles such as gold and silver.
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Dont Use Credit Buy With Savings
Anyone who wants to buy gold must save first before they invest. That is the backbone of a healthy economy. The current system relies on debt, credit, and consumption the exact opposite of a healthy economy. Dont use the bad habits that have created this system to purchase the antidote to the system.
If you buy gold, use your savings, put it on the side, and make sure that it is fully yours. Dont take out credit or speculate to buy gold. You never know what the market is doing and you may have to pay back your credit before the price of gold rises. Use your savings. You have to give up certain wishes today so that you are able to profit from your investments in the future.
Thats how an honest system works.
Be Compliant With All Laws When Buying Gold
Whenever the possibility arises, the average gold investor should buy a few coins. Most gold investors wont be able to buy a lot of coins at a time, but that can work to your advantage. If you buy a few coins per year, you can buy them privately.
This is a definite positive.
When you buy small denominations, you can buy anonymously you dont have to identify yourself or disclose any personal information. And it is fully legal. Buying small amounts at a time gives you even more security and privacy. So, the average buyer is at an advantage when buying small.
There are laws, however, for those who want to invest in bigger amounts of physical gold. If you are in a position to make larger purchases, make sure that you follow the law and that it is declared.
You need to have the right motivation to go into physical gold. If you want to buy gold to hide something because you believe that gold might be the last possibility and that the government will never find out, thats the wrong motivation.
If you believe in gold, you have to play by the rules of the game. You have to be compliant. But once you are compliant, it is possible to continue to play by the rules of the game and keep your money from being confiscated. This is possible if you store your gold in a jurisdiction like Switzerland or Liechtenstein. Especially if its stored under Swiss and Liechtenstein law, its safe.
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How To Buy Bullion
Q: Can I buy bullion products directly from the Mint?A: The Mint does not sell bullion products directly to the public only to distributors who have the infrastructure to sell and buy back to and from the public and manage sales to individual dealers in North America and around the globe.
Q: What factors contribute to the cost of purchasing bullion?A: The retail price of bullion products is based on the international gold, silver and platinum market prices, which vary daily. A premium is added to these prices to cover manufacturing, transportation and delivery costs.
Q: Where can I buy Royal Canadian Mint bullion products?A: To purchase bullion products, you can contact a local financial institution and ask for the manager or person in charge of investment services, or you can find additional details on the Bullion DNA Dealer locator page. It is the responsibility of the purchaser to ensure that the precious metal dealer chosen to conduct business with is a reputable source.
Q: What should I consider before buying/selling bullion products?As with any other important purchase, it is best to research both the different methods and sources for purchasing and selling bullion. Before acquiring these products, please consider the following
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Questions To Ask Yourself Before Buying Precious Metals
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Buying physical gold or silver as an investment is not always as straightforward as it sounds. Novice investors often get lost in a variety of options: Should I buy minted bars or sovereign coins? Maybe that limited edition coin would be a good investment?
Sensible investors evaluate bullion options by the price and premium on the gold spot price. But the premium is only one part of the equation. It doesnt necessarily mean that youll get that premium back upon the sale.
Worse, there are unscrupulous dealers out there. They will try to trick you into buying numismatics and other collectibles that have a huge premium and wont retain their value over time.
As a result, its essential to get an understanding of precious metals before dipping your toes into this market.
In this article, Ill answer some of the most important questions you should ask yourself before buying precious metals.
What Is the Best Way to Invest in Precious Metals?
You can invest in precious metals by buying the physical metal like bullion bars and bullion coins or through financial products such as gold exchange-traded funds .
Each method has advantages and disadvantages.
While investing in precious metals through ETFs sounds appealing due to its convenience, there are several key issues that investors need to be aware of in relation to this method of investment.
In this regard, buying the physical metal is a more sensible option.
Key Takeaways:
Key Takeaways:
Key Takeaways:
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How Well Does Gold Hold Its Value In A Downturn
The answer depends partly on how you invest in gold, but a quick look at gold prices relative to stock prices during the bear market of the 2007-2009 recession provides a telling example.
Between Nov. 30, 2007, and June 1, 2009, the S& P 500 index fell 36%. The price of gold, on the other hand, rose 25%. This is the most recent example of a material and prolonged stock downturn, but it’s also a particularly dramatic one because, at the time, there were very real concerns about the viability of the global financial system.
When capital markets are in turmoil, gold often performs relatively well as investors seek out safe-haven investments.
Commodity Exchange Traded Funds
Exchange-traded funds exist for all three precious metals. ETFs are a convenient and liquid means of purchasing and selling gold, silver, or platinum. Investing in ETFs, though, doesn’t give you access to the physical commodity, so you don’t have a claim on the metal in the fund. You will not get the actual delivery of a gold bar or silver coin.
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Is There A Mark
The purchase of precious metals in coin and bar form generally involves mark-ups of 2% to 8% over reigning spot prices. For example, at the end of 2020, when gold was trading at approximately $1,898 per ounce in the spot market, sovereign one ounce gold coins were selling at premiums ranging from 5% to 10%, based on variables such as rarity, purity, volume and dealer inventories.
Exchange-traded funds , are typically purchased and sold at prices very close to the spot price for the metal, but charge annual management fees to cover costs and provide a profit for the manager. Closed-end funds are a similar investment proposition to ETFs but can often trade at significant discounts to underlying spot-price of the related metal, unless they offer an option for investors to redeem shares for physical metal.
If buying bars and coins from a dealer, compare the mark-ups among a number of them. If you intend to hold precious metals for only a few years, compare the total mark-up and mark-down costs versus the estimated management fees you will pay for owning an ETF or closed-end fund. For example, if you buy and sell an American Buffalo your total cost could be 13% of your investment. In comparison, it could take 20 years to pay the equivalent costs in management fees.
Beginners Guide To Buying Physical Bullion Introduction
Hey there, you made it!
Welcome.
Chances are high you have already done this multiple times. For beginners especially, the standard start goes something like this
You likely visited Google.com, Bing, YouTube and you entered in search terms like silver investing or best gold dealer. Maybe you searched something else similar like best way to invest in silver or best silver coin to buy.
If your search terms had the words silver or gold in them, that first page of your search result was most likely filled with retail silver and gold dealers who have consciously jockeyed for the specific search terms you entered.
Either through paid advertising or optimized website pages, the top to bottom results you were given were not necessarily the best results for your specific needs. As the search continued for you, you likely received contradictory advice.
Perhaps you reasonably questioned the credibility of the information you found?
Was the information relevant to your search?
Was the author credible?
Did the provided information fully answer your question?
Was this an affiliate website designed for cash kickbacks on sales converted?
Are these reviews actually real or are they paid positive reviews written by paid bloggers or robot programs?
Do these people really have my best interests at heart?
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Can I Buy Coins From My Bank
Depends where you live. If youre in Europe or Asia, check with your bank. Some banks offer gold products to retail customers. I know several people that have done this very thing in Switzerland, for example.
To find out if a bank offers gold coins for sale, just give them a call . One caution: make sure you compare premiums, so that youre not being overcharged. Also, inquire if they offer lower rates to existing customers.
If you live in the US, it is a common misconception that you can buy gold at a bank. Many people expect a bank to issue gold, harkening back to times of old, but today most physical gold is purchased from non-bank distributors. Even the US Mint requires retail customers go through an authorized purchaser .
Store Some Coins Near You
As I mentioned earlier, you should always have access to some gold. You can put it in a safe at home or bury it outside whatever you want just make sure you can find it. The key is to have direct access to your gold if something happens.
However, you shouldnt store all of your gold nearby just what you want to have available in a crisis situation. You should have your insurance outside the country. The United States, for example, confiscated gold back in 1933 under Franklin Roosevelt. The same happened under Mussolini in Italy, under Hitler in Germany, and under Stalin in the Soviet Union.
Switzerland, on the other hand, was the last currency to go off the gold standard. They have always had a currency even during wartime that could be exchanged for physical gold. And the politicians dont have the power to confiscate gold there.
So, as a general rule, if you have over $50,000 to invest in gold, store it in a safe jurisdiction. For anything less than that, keep it nearby.
Read Also: How Much Is 18 Karat Gold Per Ounce
The Gold Mining Sector
The mining sector, which includes companies that extract gold, can experience high volatility. When evaluating the dividend performance of gold stocks, consider the company’s performance over time in regard to dividends. Factors such as the company’s history of paying dividends and the sustainability of its dividend payout ratio are two key elements to examine in the company’s balance sheet and other financial statements.
A company’s ability to sustain healthy dividend payouts is greatly enhanced if it has consistently low debt levels and strong cash flows, and the historical trend of the company’s performance shows steadily improving debt and cash flow figures. Since any company goes through growth and expansion cycles when it takes on more debt and has a lower cash on hand balance, it’s imperative to analyze its long-term figures rather than a shorter financial picture timeframe.
The Role Of Gold And Silver In A Portfolio
Put simply, precious metals serve as a hedge against market volatility, political instability, currency weakness, and economic collapse.
Because they are chemically unique, physically rare, and easily malleable, gold and silver have been used as money across much of the world for thousands of years. While they can be quite volatile, they historically store wealth very well over the long-term.
Benefits: Precious metals have no credit risk, maintain their global purchasing power over the long-term in the face of inflation or currency devaluation, and arent very tightly correlated with stocks, bonds, or real estate.
Downsides: Commodities including precious metals produce no cash flows themselves and can be quite volatile. Most precious metal miners are historically poorly-managed companies that lose a lot of money.
Due to all this, whether investors should own gold and silver is surprisingly controversial.
On one hand there are people who distrust the global economic system and invest almost entirely in precious metals. On the other hand, many mainstream portfolios have zero exposure to precious metals, with some investors believing that no respectable portfolio should have any gold or silver allocation at all.
I think investors in certain countries like the United States get too complacent. They think a lot of the bad things that happen to other markets cant happen to their own, even if it has happened multiple times to the U.S. in the past.
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Finding The Right Price & Dealer
Before you begin comparing the prices of different precious metals dealers, you need to make sure that the dealers you are researching are actually licensed to sell precious metals. Taking the time to verify their status will not only ensure that their merchandise has been lawfully obtained, but that they also understand the various policies regarding precious metals sales, such as taxation and reporting.
After you have confirmed their license statuses, it is time to compare the different dealers. When examining prices, be sure to take into account other expenses outside the premium rates such as shipping, insurance and taxation. You should also take note of their different policies regarding shipping and methods of payments to see if they can accommodate your needs.
