Best Gold Investment Tips
In the USA about 2% to 3% of all Americans own some form of physical gold and silver. This blog explains the best tips when you investing in gold and silver.
a) Do not Buy from dishonest dealers
You may have heard the expression, “You can’t make a good deal with a bad person.” This is very true when buying metals. It’s estimated that there are over 10,000 metals broker-dealers in the U.S. alone.
The majority of them are very reputable and honest people, however; rest assured that there are still quite a few ‘wolves in sheep’s clothing’ dealers out there. They target new and inexperienced investors and take advantage of their inexperience.
There is practically an unlimited number of games that dealers can play to ensure that they win and you don’t. The best way to overcome this is to educate yourself, just like you are doing right now by reading this blog. The more you know about gold and silver, the smarter shopper and buyer you will become.
That’s why the Investor Advisory Network is such an excellent resource for investors. I truly wish IAN was available when I starting investing. I could have saved myself many tens of thousands of dollars and a great deal of heartache and stress.
b) If the price seems too good to be true
The metals market is global. These days anyone can check the spot price of gold and silver from a smartphone, computer, TV or just about anywhere. Since the beginning of time, humans have always been easy to fool when it comes to amazing deals.
They seem to fall for the same scams century after century. As liquid as the metals market is, there is absolutely no reason for anyone to have to sell your metals at way below market prices... none!
The scammers always have a compelling story to justify why their super-low price is available right now, and only for you, if you are lucky enough and can act fast. Trust me on this. This kind of deal does not exist.
Of course, you can find an occasional seller on eBay® or Craig’s List who does not know the value of what they have and/or they are in a financial crisis and are offering their metals at lower prices.
These opportunities are few and far between and certainly not worth most people’s time to seek out unless it’s a hobby for you. Plus, your odds of buying counterfeit items are much higher when buying from these sources. Just remember this; if a gold and silver deal seems too good to be true... it is.
c) Counterfeit metals.
Reports of counterfeit precious metals have increased over 2,000% in just the past two years. There are two main reasons for this.
As metals prices rise, it becomes more profitable for counterfeiters to enter the marketplace. In addition to that, the technology has evolved to the point where they now have machines that can do almost perfect jobs counterfeiting metals.
It used to be that most of the counterfeit items were poor quality and was limited to most bars, because it was much easier to hollow them out, fill them with inferior metals and then cover up the holes with the real metal.
Now, the machines are so precise that they do an incredible job of counterfeiting gold and silver coins, bars and anything you can imagine. In fact, some of them are now starting to counterfeit numismatic coins. They are so good that these days even some of the experts are fooled.
For the average person, it is not feasible to have all the instruments and the specialized knowledge to be able to tell the difference between the real thing and a counterfeit. So, what should the average person do to avoid spending their hard-earned money on worthless counterfeit metals?
The easiest way to do this is to simply purchase from reputable dealers, who buy from mint-direct wholesales. That means the mints manufacture the items, they either sell directly to the broker/dealer, or they sell to a handful of giant mint-direct wholesalers, who sell directly to the broker/dealer. When purchasing this way, counterfeit items cannot be introduced into the supply chain.
The majority of counterfeit metals now comes from China and they are often found at flea markets, Craig’s List, eBay®, etc. Often they are small sellers who are offering a below-market price, and unsuspecting buyers jump at the opportunity to get a great deal.
These sellers can disappear in a moment’s notice and that’s how they usually avoid getting caught. As they say, everything that glitters isn’t gold. Use your good common sense and only buy from trusted dealers.
d) Another pitfall to avoid is buying commemorative coins from private mints. Commemorative coins from private mints are often the coins you see advertised on TV or in magazines that have various images on them that commemorate an event or famous person.
The problem is they usually are filled with inferior metals and only have an ultra-thin coating of actual gold or silver on the surface.
The advertisers are brilliant in knowing exactly what to legally say and what not to say. They say it in a way that most non-experienced shoppers are confused and often assume the coins are solid gold or silver. While some of these coins may be beautiful, they usually make lousy investments and cost way more than they are worth.
e) Most experienced metals investors will tell you, “If you can’t hold it in your hand, you don’t own it.” Another popular saying is, “If your name is not on the title to it, you don’t own it.”
The problem is thousands of individual and institutional investors believe that since they have a piece of paper saying they own metals, they do own metals and that they can get them anytime you wish. Unfortunately, this is often not the case with gold and silver.
How to Sell Your Precious Metals
Most likely there will come a time when you will want to sell some or all of your gold and silver. You may want to take some profits along the way, you may need to raise some cash, or you may choose to cash out at the top. It’s actually pretty simple to sell your metals and it’s kind of like buying in reverse.
Just like you shop around for the best price when you buy metals, you should shop around for the best price when you want to sell your metals.
You do not have to sell them back to the broker/dealer from whom you purchased them. You can sell them to an individual, a local metals shop or sell them back to an online metals company.
If you sell them back to a local shop, you will not have to incur shipping and insurance fees. When you sell locally, you and the dealer agree on a price and you get paid for your metals at the time of the transaction.
However, as discussed above, local shops often have higher overhead and will usually offer you a lower price than a higher volume online company will.
To ship metals to an online broker/dealer, most people just put them in a FedEx box, and ship them insured to the dealer. Often the additional amount they get from the sale of the coins more than makes up for the small shipping/insurance fee.
Most brokers will then either mail you a check or wire the funds directly to your bank. People do this all day long and the process is actually quite simple.
If you stick with government issued coins and/or name brand bars, you will most likely find them much easier to sell. Otherwise, if you buy some unusual, uncommon metals and then call up a broker/dealer to sell them, they will usually need to see them before they commit to buying them and decide on a price that they will pay for them.
It’s amazingly simple to pick up the phone, call a broker/dealer and tell them you have a monster box of 500 American Silver Eagles coins that you want to sell. That is a no-brainer.
On the other hand, if you tell them you have some generic silver coins with an image of Santa Claus on them and you are not sure who minted them, you will likely find them harder to sell, and will probably get less for them, even if they are actual 1oz silver coins. This is pretty much common sense, really. Selling a name-brand anything is usually easier than selling something generic.
Keep in mind that in most cases, when you purchase you will pay some amount above the spot price and when you sell, you will likely receive an amount below the spot price.
Similar to stockbrokers, the dealers must make a profit in order to stay in business. The difference between what they pay for the metals and what they sell them for is their spread and it’s how they make their profits.
Where to Store Your Precious Metals
Where to store your metals is always an important question that comes up. After all, you invest a lot of money into your metals, so making sure that you keep them safe is vital.
This is a very deep and broad subject with lots of variables, but we will hit the high points here. You can find more information about this important subject on our website.
The single most important factor in storing your metals is to diversify. Don’t put all of your metals in one place. If something unexpected happens, then you will lose everything.
Your core options are to store them yourself or have a third party store them for you. Everyone’s personal situation is different, so there is no one right way to do this.
You should evaluate your own situation and make the decisions that best suit your needs. Each option has its own pros and cons. Evaluate your options and choose the ones that work best for you. It goes without saying but always keeps your personal and family safety foremost in mind.
One thing I always suggest to everyone is to at least have a number of your metals where you can get your hands on them within the very short notice.
You’ve probably heard of a “Go Bag”. It’s a survival preparedness bag that you keep critical items in, and keep it readily accessible. If a disaster were to strike, you simply grab your Go Bag and head out.
I don’t suggest you keep your metals in your Go Bag, but I do suggest that you at least keep a small number of your metals around your home or office so that you can grab them at a moment’s notice simply because, you never know what tomorrow may bring. Precious metals can come in pretty handy in uncertain times.
Personal Storage Many investors choose to store their metals in a safe, located in their home or office. For many people, this is a great option. Be sure and purchase a very high quality safe.
Cheap safes are a complete waste of money and should be totally avoided. When it comes to choosing a safe, there is an almost unlimited number of different types to choose from. They come in many different sizes, shapes and price ranges.
The most important ratings to keep in mind are the fire and burglary ratings. Think about the items you plan to store in your safe and choose the safe that has the right ratings for your needs.
You really want to find a way to either bolt your safe to the floor or even cement it in if possible. Try to find a way to hide your safe. If they can’t find your safe, they can’t get to it.
Here’s a great tip for choosing a safe. Call a local safecracker who has been in business for a long time and asks him/her. They have seen it all and they know which safes are high quality and which ones are junk. When you want to know which safes will hold up the best, ask the guy who breaks into them for a living.
Another option that may sound strange to you at first is to bury your metals. You would be shocked to know how many wealthy people have millions of dollars’ worth of metals buried in secret locations. Most people use larger size PVC pipes, and glue the caps onto each end to keep moisture and air out.
Bury them at least four feet deep to avoid detection by a metal detector. Bury decoy pieces of scrap metals above and around the location to avoid detection. This concept has worked for thousands of years and it still works just as well today.
Some people choose to find little hiding places around their home or office to hide their metals. Places where no one would ever think to look. You can also search online and find many everyday items that have hidden compartments for storing valuables. Just be sure to use your creativity and imagination.
Try to think like a thief would think. Again, don’t put it all in one location. Spread it out in many different locations to diversify your odds. Be sure to have a system to keep track of where your metals are stored, and be sure to carefully hide or code your treasure map so that others cannot find it.
Third Party Storage Vaults There are many different vault storage facilities around the world. This can be a great option if you have a fairly large amount of metals.
These are not inexpensive options but they can be one of the safest ways to store your metals. You should really do your homework when choosing the facility that’s right for you.
There are many different types of fees and storage options and it’s important that you understand them up front. The most basic options are Segregated or Allocated vault storage. Segregated is the most expensive but it can also be the most preferred method.
The segregated storage means that they store your exact metals individually for you. When you go to sell them or have them shipped, they will be the exact same metals that you had shipped to the vault. What you put in, is what you get out.
The other method is the Allocated method. The allocated storage means that you will have the exact same number of ounces of metals that you put in, but it will not necessarily be the same metals you had shipped to them or in the same form.
They often use very large gold and silver bars because they are easier to store and more cost-efficient.
You may have shipped them 1,000 Silver Eagle coins, but when you request that your metals be shipped out, you may receive it in the form of a single 1,000-ounce silver bar.
This option is a bit less expensive, but you must be sure that you are dealing with a reputable company and that you actually maintain title to your quantity of metals. Make sure that your facility has all of the right insurance and coverages in place.
Bank Safe Deposit Boxes Lots of investors want to keep it simple and just put their metals in a bank safe deposit box. Most people are totally unaware that this option does have risks. If your bank were to close or go out of business, or if there is a national emergency, you might not be able to access your metals for a period of time.
Also, the contents of your safe deposit box are not insured by FDIC insurance. If your bank were to get robbed or destroyed in a disaster, you would not be reimbursed for your losses. Lastly, most people have no idea of the new Department of Homeland Security (DHS) laws that have been passed.
DHS now has the power to inspect safe deposit boxes without a warrant and seize any gold, silver, guns, etc. that they find. They don’t even have to notify you. My advice is if you want to use your safe deposit box, don’t put everything you have in it. Diversify the storage of your holdings in different places so you limit your risks.
Lastly, I hesitate to mention this as some may think this is ‘crazy talk’. If at some time in the future, the government were to declare a national emergency and decide they need to seize all gold and silver to keep the country going, the very first place they will likely go is to the vaults and banks, because that is where much of the metals are.
It’s their easiest option for getting the most metals with the least effort. So, if this is a concern of yours, then choose your storage locations carefully.
Keep Your Mouth Shut
You can do a fantastic job of diversifying the storage of your metals’ holdings and still lose them all in a flash. There’s something about human nature that compels people to want to talk about what they have and what they did. My strong advice here is to discipline yourself and tell no one where your metals are stored.
If you feel compelled to tell your spouse or significant other, then that’s your call. It’s just a fact that the more people you tell, the greater the odds of something unforeseen going wrong.
One of the greatest things about gold and silver is that they are one of the most private investments you can make. I encourage you to keep them private and keep them safe by keeping it to yourself. It’s no one’s business but yours.
How to Track Your Precious Metals Performance
Of course, there are many people who simply collect, buy-and-hold metals, and have no intention of ever selling them, and that’s fine. However, many people like to keep up with the performance of their metals’ portfolio and track its progress.
When you stay on top of your metals performance, it’s much easier to take advantage of buy and sell opportunities that the market presents. Plus, when you sell your metals, you will need a record of when you bought them and what you paid for them, so you can claim a short-term or long-term capital gains profit or loss on your tax returns.
There are hundreds of websites that will show you the real-time spot prices of precious metals. Simply Google precious metals spot price and you will find a huge number of sites where you can check the current spot prices.
To really keep up with the entire performance of your metals portfolio requires a lot of time and manual effort unless you have a system designed to do this for you.
As one of the benefits of joining the Investor Advisory Network, you may have the option to get a trial version of the Wealth Watchmen. We believe it is the world’s most advanced precious metals tracking system.
You simply plug in your metals holdings and any future purchases or sales, and the system does an amazing job of keeping you completely up to date with everything you need to know.
It will even send text and email alerts to you notifying you of key indicators that you set for your portfolio. This is an invaluable service and just one of the many benefits that you get when you join the Investor Advisory Network.
What You Need to Know Before Investing in Gold and Silver
Throughout recorded history, the rewards of investing in gold and silver have been proven time and time again. I invite you to learn more about one of the most important asset classes of all time.
It’s my opinion that physical gold and silver should be a critical part of a solid wealth strategy. In this book, I will clearly explain the reasons why this is a very prudent course of action.
To begin, let’s first take a look at some of the reasons you should consider adding physical gold and silver to your portfolio.
Why Consider Gold and Silver as an Investment Option?
Anytime you make an investment, there is always a risk of capital loss. So it’s always wise to evaluate the risk/reward factors of any investment before diving in. The risk/reward factors for gold and silver are unmatched.
Throughout the rise and fall of the greatest empires, this world has ever seen, precious metals always kept their purchasing power as a solid value.
Why Haven’t I Heard More About Investing in Precious Metals?
You may be asking yourself this question, “If gold and silver are such great investments, why don’t more people own bullion and why hasn’t my investment advisor encouraged me to invest in them?”
Good question. After all, it’s estimated that only about 2% to 3% of Americans own any form of precious metals bullion. Interestingly, many Eastern countries have much, much higher levels of bullion ownership per capita.
There are many reasons for this but one big reason is that the traditional “paper” investment options like stocks, bonds and mutual funds, ETFs, Treasury notes, Forex markets, etc. make up the gigantic majority of the investment capital in the world.
When you compare the amount of available, investable physical gold and silver in the world, to the total value of all the “paper” investment options in the world, gold and silver look like a fly on an elephant.
The key to finding out “why” is to follow the money trail. The giant global brokerage houses and megabanks make billions in profits by selling these traditional paper investments and the majority of them don’t offer physical metals at all.
The chances are good that your investment advisor or broker does not offer physical precious metals as an investment option.
If they suggest you buy them, they will not make any profits on your metals purchases or future commissions on the portion of your invested money that you shift to metals. It’s a lose-lose situation for them to suggest that you buy physical metals.
For newer advisors, they typically don’t even realize this other world of real assets even exists because they are pushed through a cookie cutter training program that brings everyone back to an overpriced/incorrect insurance plan.
The key point here is to do your own research and make your own investment decisions based on the facts and do not allow yourself to be swayed by the mass investment media or self-serving investment advisors.
What Are the Best Forms of Gold and/or Silver to Buy?
Be aware that this too is a very hot issue and there is no one “right” answer to the types of metals you should hold. If you ask 100 different people what you should own, you will get 100 different answers. A key determining factor is how much money you are going to invest in precious metals.
Obviously, if you can only invest a small amount, your options and ability to diversify will be limited. The more money you have to invest, the greater your options and the more you should diversify your holdings.
If you are just starting out or working to build up your metals portfolio, I don’t think you can go wrong with the American Eagle coins or the Canadian Maple Leaf coins. Both coins are available in both gold and silver. These outstanding coins are two of the most widely recognized, trusted and respected coins in the world.
Both governments respectively guarantee the weight and purity of these coins. They are easy to buy and easy to sell. Both coins are approved to be held in a precious metals IRA.
Very importantly, you can buy all of the gold and silver American Eagle coins, and the silver Canadian Maple Leaf coins you want, and there is absolutely no reporting of it, neither when you buy or when you sell. The gold Canadian Maple Leaf coins, however, are reportable when you sell them in certain quantities.
If you buy from a broker/dealer who buys the coins from a trusted “mint direct” wholesaler, you are virtually guaranteed to always get excellent quality coins that come directly from the government mint and thus there’s no worry about the possibility of receiving counterfeit coins.