These days, it is essential to do your research and investigation especially when it comes to investing. Do not let experts sway your opinions and make a genuine effort in knowing the actual value of a product or service. It is also best to curate the information you’ve gained and let others know about them.
While it is still early, know the pros and cons when investing in precious metals like gold and silver. You can also check with various websites, forums, books, and other reputable sources like Nationwide Coin & Bullion Reserve on when is the best time to invest. Finally, you should rely on inside information by investing yourself in what you can afford to lose and see whether there will be gains or if gold is really a good hedge against inflation. Here are some additional tips to help you out.
- Only Invest in Physical Silver and Gold
Anyone interested in precious metals needs to understand that gold and silver were used as a form of money a thousand years ago. It only lost this role when Nixon removed the dollar from the gold standard in 1971. It was then that the whole world transitioned into the paper money or fiat system that is not essentially backed by gold. Before, every printed bill was backed by a bullion reserve in the bank.
Now that the currencies in the world are not backed by gold, the paper market has grown a lot because people are seeking to buy coins that are actually backed by a commodity. This is evident in COMEX or commodity exchange markets, where sometimes, people have over five hundred paper claims for a physical coin or bullion. Read more about commodities exchange on this page.
There are so many investors out there who wholeheartedly believe that they own gold, but the reserves are not enough to cater to all of them. This is why when you decide to try investing in precious metals as a hedge against a possible market crash, you must have a physical coin or bullion that you can store in a depository or bank.
Some paper products will not guarantee you own any precious metals. If you go through the terms and conditions of an SLD, GLD, or exchange-traded fund, you may discover that they do not tell you whether they have the actual bar or coin. Aside from that, you are not essentially allowed to get the coins delivered to you because of hidden clauses. In a harsh war during a monetary crisis, some of them may request the bank to pay you in fiat instead of the actual metal, which you do not want to happen.
A pro tip is that if you believe in gold and you would want to add a small percentage of it to your portfolio, make sure that you physically own this. Get the details like hallmarks, bar numbers, and other essential components of your ownership so you will not have any problems in the future.
- You Must Have an Unencumbered and Direct Ownership Over It
There is a famous and old saying that goes something like this, “If you can’t hold a gold coin, then you don’t own it.”
It is vital to understand this statement, especially when you do not have much money to start a gold mine or get the coins in bulk. If this is the situation that you face, you may be better off storing your pile of coins nearby so you can quickly access them during a sudden market downturn.
If you have a lot of money where you want to allocate some parts of your wealth into gold, it will make more sense if you can store them in countries where you will give stronger property and privacy rights. The best jurisdictions in the world are commonly found in Liechtenstein and Switzerland. They offer the best services if you want to deviate from banks’ traditional systems and want more ownership of the metals in an unencumbered way.
Ensure that regardless of your chosen company, it should be made clear that you are the uncontested owner of the coins and bullions. Everything inside your depository belongs solely to you. The companies that you are entrusting your bullions should not be able to lease them out, hedge them, or pledge them. See to it that these things get into the fine print to be on the safe side.
- Get Only the Most Liquid of Assets
You must be able to trade your gold for cash as much as possible. The primary rule is to build a portfolio of liquid silver and gold stocks. This means that the best investments to consider include the Austrian Philharmonic coins, the Maple Leaf, and the Australian Nugget. One of the main reasons for this is that you do not want to be someone offering a kilo of gold bars around town when there is a crisis. Choose the ones that have lower fabrication fees and are legal tender in some countries.
For example, if you are buying a maple leaf, this coin comes from the Canadian mint. Whenever you buy, the price of the paper spot price of the gold should be near or equal to the physical ounce. Read more about spot prices at this web address: https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/spot-price/.
On top of these, know that there is a possible fabrication fee where the dealer is required to pay to the mint so that the coins can be physically produced. There are also brokerage fees for all the work the dealer has to do on your behalf.
Whenever you buy coins like the Austrian Philharmonic or the Maple Leaf, ensure that you do not pay more than 5% of the paper spot price. This will depend on the overall set-up but always stick to the current price range.
If you are happy and satisfied with the stock of your domination coins, you can start beginning to move into bigger and more complex formats. Know that the smaller the unit you have, the higher the offers from premium clients. Also, beware of phony sources out there.