Answer.We probably get that question more than any other pretty much on a daily basis. The answer, however, is not as straightforward as you might think. What you buy depends upon your goals. We usually answer the What should I buy? question with one of our own Why are you interested in buying gold? If your goal is simply to hedge financial uncertainty and/or capitalize on price movement, then contemporary bullion coins will serve your purposes. Those concerned with the possibility of capital controls and a gold seizure, or callin, often include historic pre gold coins in the mix. Both categories carry modest premiums over their gold melt value, track the gold price, and enjoy strong liquidity internationally.
Answer.The biggest trap investors ll into is buying a gold investment that bears little or no relationship to his or her objectives. Take safehaven investors for example. That group makes up of our clientele, and probably a good of the current physical gold market. Most often the safehaven investor simply wants to add gold coins to his or her portfolio mix, but too often this same investor ends up instead with a leveraged financed gold position, or a handful of exotic rare coins, or a position in an ETF that amounts to little more than a bet on the gold price. These have little to do with safehaven investing, and most investors would be wellserved to avoid them.
Q. Why not wait for the necessity to arise, then buy gold?
A.First, and most important Check theBetter Business Bureaus profile on a company before you do business with it. Check not only its rating but the number of complaints lodged against it and how those complaints were handled. A consistent record of complaints can be a warning sign even if the company has managed to keep an A rating. This is a and straightforward step every firsttime investor should take, but it is amazing how many ignore it.Second, choose a gold firm that has a solid track record. Ten years in business is good; fifteen years or more is even better.Third,choose a firm with a commitment to keeping you informed, i.e., one that is interested in answering your questions now and keeping you informed in the future. If a sales person gives you short shrift or hits you with a heavy sales pitch take it as a warning.
A.A solid, professional gold firm can go a long way in helping the investor shortcut the learning curve. A good gold firm can help you avoid some the problems and pitlls encountered along the way, and provide some direction. It can help you in the beginning and through the course of your gold ownership both in additions to your portfolio and liquidations. A solid companion piece to the interview you are now reading isHow to Choose a Gold Firmoffered on this website. It offers clear guidelines for newcomers and is wellworth the five or ten minutes it takes to read it.
A. Golds baseline, essential quality is its role as the only primary asset that is not someone elses liability. That separates gold from the majority of capital assets which in ct do rely on anothers ability to pay, like bonds and bank savings, or the performance of the management, or some other delimiting ctor, as is the case with stocks. The first chapter of my book,The ABCs of Gold Investing,ends with this No matter what happens in this country, with the dollar, with the stock and bond markets, the gold owner will find a friend in the yellow metal something to rely upon when the chips are down. In gold, investors will find a vehicle to protect their wealth. Gold is bedrock.
Historic fractional gold coins bullionrelated
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A. Since, for one reason or another, it is difficult to take delivery from any of the ETFs, they are generally viewed as a price bet and not actual ownership of the metal. Most gold investors want possession of their gold because they are buying as a hedge against an economic, financial or political disaster. When disaster strikes, it does not do you much good to have your gold stored in some distant cility by a third party. For this reason, over the past couple of years the trend even with hedge fund operators has been away from the ETFs.
A.If you were to take a croection of advisors who recommend gold as part of an investment portfolio, the level of ersification would range between and . We recommend between and . How high you go within that range depends upon how concerned you are about the current economic, financial and political situation.
A.The same vetting rules outlined earlier apply. Check them out. Too often investors make the mistake of believing that the gold firm that sponsors their vorite political commentator is also the best place to make their gold purchases. National media campaigns are expensive and those costs are usually covered in the prices paid by investors for their gold and silver coins. In some instances that markup can be twice the underlying metal value. Take care that you are not paying too much for your gold and that you are buying the gold items best suited to meeting your goals.
Answer.If you want to protect yourself against inflation, deflation, stock market weakness and potential currency problems in other words, if you want to hedge financial uncertainties, there is only one portfolio item that will serve you in all seasons and under most circumstances gold coins and bullion. Make sure you do your homework on the company with which you choose to do business, and make sure that the gold ownership vehicle you choose truly reflects your goals and aspirations.
Reader note The Better Business Bureau began its Gold Star Certificate program in and USAGOLD has been a recipient of the award every year it has been issued fourteen straight years without a complaint. The firm has been a member of the Bureau since and accredited every year since the year it began its accreditation program with an A rating. To see USAGOLDs full BBB report,please visit this link.Be sure to read our reviews.
Q. How has the verylowtonegativerate environment affected the gold market?
Q. Can you briefly describe what you believe to be the biggest mistake investors make when starting out as gold owners?
Q. In your book, you state Who you do business with is one of the most important aspects of gold investing. Why is that?
Q. What about gold futures and options contracts?
One of the best places to get updates on your vorite precious metal. . . Among the most active on the list and in the industry.
Q. Please summarize What is the best approach for the safehaven investor?
Q. You frequently mention gold as insurance. What do you mean by that?
Q. What about the high profile gold companies that advertise on talk radio and cable television?
Answer.Futures and options contracts are generally considered one of the most speculative arenas in the investment marketplace. The investors exposure to the market is leveraged and the moves both up and down are greatly exaggerated. Something like out of investors who enter the futures/options market come away losers. For someone looking to hedge his or her portfolio against economic and financial risk, this is a poor substitute for owning the metal itself.
USAGOLD can help you achieve the right balance.
Reader note For a useful review of golds role in preserving assets under various worstcase economic scenarios, please seeBlack Swans, Yellow Gold How gold performs during periods of deflation, chronic disinflation, runaway stagflation and hyperinflation. OPEN AESS.
Answer.Many of our clients own gold stocks and we believe they have a place in the portfolio. However, it should be emphad that gold stocks are not a substitute for real gold ownership, that is, in its physical form as coins and bars. Instead, stocks should be viewed as an addition to the portfolio after one has truly ersified with gold coins and bullion. Gold stocks can actually act opposite the intent of the investor, as some justifiably disgruntled mine company shareholders learned in the recent past when their stocks iled to perform as the price rose. There is no such ambiguity involved in actual ownership of gold coins and bullion. When gold rises, they rise with it.
A ersified approach to the precious metals portfolio works best.
A.Positively. Most of the strong demand globally since the beginning of , has been driven by the lowtonegativerate environment. At a time when fixedyield investments pay little to nothing, gold and silver at least provide some upside potential. In addition, these metals protect against the downside risks implied by the low to nonexistent rates of return. Those two very persuasive arguments have translated to strong institutional and fund demand at the ETFs as well as demand among inidual investors for physical coins and bullion. A mid Bankrate survey of investors is telling in this regard. One in six chose gold as the best place to park money they would not need for the next ten years, the same number that chose stocks.
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Though this interview will help you start safely on the road to gold ownership, it is just an overview. If you would like more detailed information, I would recommend my book,The ABCs of Gold Investing How to Protect and Build Your Wealth With Gold,which covers the who, what, when, where, why and how of gold ownership in detail. You can also shortcut the learning curve by contacting our offices and asking to speak with one of our expert client advisors who will be happy to answer your questions and help you get off to a solid start.
A. Once again the same vetting rules outlined earlier apply. Some of the most visible online gold businesses have lengthy complaint records at the Better Business Bureau.
Q. Can you give us a profile of the typical gold investor?
The ABCs of Gold Investing How To Protect and Build Your Wealth With Gold
Q. How can the average investor distinguish between the good gold firms and the bad?
A.Over the past few years, as concern about a financial and economic breakdown spread, there were periods of gold coin bottlenecks and actual shortages. In at the of the financial crisis, demand was so great that the national mints could not keep up with it. The flow of historic gold coins from Europe was also insufficient to meet accelerating demand both there and in the United States. Premiums shotup onallgold and silver coins and a scramble developed for what was available.There is an old saying that the best time to buy gold is when everything is quiet.I would underline that sentiment. As you can see from the chart immediately below, the demand for newly minted bullion gold coins shot up dramatically in the aftermath of the financial crisis, reached a plateau and has remained stubbornly in place ever since. For , the U.S. Mint reported gold bullion coin volumes at the highest level since and the fifth best year on record.
American Numismatic Association since Industry Council for Tangible Assets since
A.The short answer is When you need it. Gold, first and foremost, is wealth insurance.You cannot approach it the way you approach stock or real estate investments. Timing is not the real issue. The first question you need to ask yourself is whether or not you believe you need to own gold. If you answer that question in the affirmative, there is no point in delaying your actual purchase, or waiting for a more vorable price which may or may not appear. Cost averaging can be a good strategy. History tells us that panics, mania, crashes and collapses are as common to financial history as thunderstorms to placid summer afternoons. The real goal is to ersify so that your overall wealth is not compromised by economic dangers and uncertainties like the kind generated by the financial crisis.
Q. What percentage of my assets should I invest in gold?
Reader Note USAGOLD offers anOnline Order Deskas a subsidiary service for our clientele. Here you can choose from a full assortment of eslished investment items including modern gold and silver bullion coins and bullion bars, historic fractional gold coins and historic U.S. gold coins. At our Online Order Desk, you can order confidently any time day or night and on weekends at very competitive rates.
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A.Traditionally, wealthy, aristocratic European and Asian milies have kept a strong percentage of their assets in gold as a protective ctor. The long term economic picture for the United States has changed enormously over the past several years. As a result, that same philosophy has taken hold in the United States particularly among those interested in preserving their wealth both for themselves and for their milies from one generation to the next. In recent years, we have helped a good many mily trusts ersify with gold coins and bullion at the advice of their portfolio managers. Few people know that the United States is the third largest consumer market for gold after China and India.
A.Gold owners are a group of people I have come to know very well in my years in the business. Contrary to the less than flattering picture sometimes painted by the mainstream press, the people we have helped become gold owners are among those we rely upon most in our daily lives our physicians and dentists, nurses and teachers, plumbers, carpenters and building contractors, business owners, attorneys, engineers and university professors to name a few. In other words, gold ownership is pretty much a Main Street endeavor. A recent Gallup poll found that of American investors rated gold the best investment regardless of gender, age, income or party ID. . . In that survey, investors rated gold higher than stocks, bonds, real estate and bank savings.r firsttimebuy gold