If you go purely with the information provided in the commercials, it's easy to start thinking that all gold investments are created equal. Just pick a coin, toss it into your portfolio, and rest easy since your investment will always be profitable. While there's no question that gold will protect your savings like nothing else can, it's important to consider the context of your investment.
Are you simply doing a straightforward hedging? Are you concerned about government regulations?
If capital controls are a realistic possibility, then historic coins may be a prudent addition. On the other hand, if you're just hedging then modern bullion coins or simple gold bars may be all you need.
Buy With Plenty of Time Left
During the infamous 2008 global crisis, investors were desperately scrambling for the gold American Buffalo coin. Many of them saw what was happening to the stock market and decided that they were going to opt for the safety of gold bullion.
However there was one problem: the US Mint was so overwhelmed by demand that it temporarily stopped producing the coins. Imagine being in the middle of a crisis like that and unable to purchase gold bullions. Talk about getting stuck between a rock and a hard place.
While you should feel free to take your time, you don't want to be purchasing your gold bullion at the last minute. Buy when things are going well.
Trust but Verify
If you're angling to protect your portfolio while navigating capital controls, historic gold bullion coins are considered a safeguard. It's just a solid method of hanging onto your precious metals even when you couldn't otherwise.
That being said, you don't want to end up being one of those uninformed consumers who boasts a historic gold bullion coin that isn't actually historic...or gold. When you're told about the year or given specifics about the coin or bar's composition, you should be wary of taking people at face value.
Similarly, although the price of your gold bullion may be tied to the current price of gold, you don't want to find yourself paying more than necessary. The good news is that you can easily research these details independently.
Consider Your Storage Conditions
There's no question that bullion's a valuable investment, however once the delivery's been made there are storage concerns to consider. Whether you're planning to eventually sell or you simply want the gold to stay in excellent condition, you'll want to find ways of preventing and mitigating damage to your investment. It's the price of opting for physical assets.
In terms of space, bars stack up nicely and are generally convenient that way. Meanwhile the convenience of bullion coins will depend on how many you purchase. It's also worth noting that finer .9999 gold is less durable than .999 gold bullion that has copper alloy mixed into it. These are details you'll want to sort out ahead of time.
Are You Really Just Hedging?
Everybody knows that gold is a solid investment if you're looking to protect your portfolio. You could buy it purely for the purpose of hedging and still come out on top. When it comes to choosing your specific bar or coin, however, the potential uses you have in mind for your investment are a factor that could sway your decision.
Are you interested in being a collector? Are you looking at gold bullion with an eye towards buying coins that'll have more value down the line?
Mintage Rarity and Grade Rarity
When buying gold, you have to consider the factors that could end up influencing how much you spend on your bullion. Mintage rarity means that there's a higher demand for the coin than there are coins that have been produced. Grade rarity means that you're dealing with a coin that has a rare grade even if the coin itself isn't necessarily exotic.
What does that mean for you?
A pitfall to look out for is the price fluctuations when you're dealing with mintage or grade rarity. A lot of the time these coins are expensive purely because of current trends. This may affect your bottom line if your purchase is inflated due to mintage rarity or grade rarity and then investors move on to a new fad.
At the end of the day, a lot of thought must go into choosing the best gold bullion for your investment . What are your intentions with precious metals? How do you plan to keep them? Gold can provide a valuable boost to your retirement portfolio, but you have to be selective in order to get the most out of it.
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