Pundits sometimes say "diamonds are a girl's best friend", but believe me, it's not easy to out-perform gold. Buying gold and other precious metals is the best idea during a recession. Although the interest rates offered by banks are low, the value of gold goes up constantly.
There are 3 main ways of investing in gold. You can try ETFs or Exchange-Traded Funds; there are gold stocks; and then you can buy gold bullion. Bullion is by far the best bet for beginners.
There are 2 kinds of bullion available: ingots and coinage. I recommend you begin with coins. Coins are simpler to buy and easier to sell than gold bars. On top of that, coins give you a lot greater flexibility when it comes to liquidating your precious metal holdings. For example, if you wanted to sell sixty percent of your gold holdings, it's more straightforward if you own twelve coins rather than a couple of ingots.
Do not spend a single penny before you make sure you can get the most advantageous deal available. Gold traders earn their profit from "the spread". This is the difference from when they buy for less than the market price and retail for more. This is subject to variation but often depends on the amount of gold, and the type of gold for sale. It can also depend on who the seller is.
Stay away from those gold vending machines. They have become common in malls and shopping centers all over the world and are aimed at investors who do not know what they are doing. No seasoned dealer would ever think of sourcing from a vending machine, and you shouldn't either.
Buying gold medals and coins is the most obvious way to go. Coins made from gold can be split up into two main kinds: numismatic and bullion coins. Bullion coins tend to be minted solely for the investment market, whilst numismatic coins are made to be used as currency and often have extra value apart from their gold composition. How much bullion coins cost is calculated on their gold content plus a mark-up of something like 5% to eight percent. This figure is generally called the "premium price". Typical investment gold coins include the Chinese Gold Panda, Malaysian Kijang Emas, French Napoleon, Canadian Gold Maple Leaf and Mexican Gold 50 Peso.
Commemorative coins are usually advertised with the suggestion that their value will rise over time. Sadly, this is usually not the outcome. The seller's original sale price for commemorative coins is nearly always higher than the gold content. Commemorating events like the 50th Anniversary of KFC or The Centenary of Jimmy Raison's Hanging rarely adds value to the coin itself. This is the reason almost all experts warn against speculating on commemorative coins.
I would often tell greenhorns to exclusively deal in bullion coins and search for those with the least premium over the spot price of gold quoted online. The 1 oz. Krugerrand from South Africa is the most popular bullion coin there is and almost always trades at the least premium over the basic gold price.
The cheapest location in the world to buy gold coins is Hong Kong. The Central Area of Hong Kong around Queen's Road is crammed with banks offering gold coins at amounts as little as 0.2% over the premium price. Needless to say, unless you are within walking distance, you would have to factor in air fares to see if a visit would be worthwhile. But if you are going anyway...
There are 3 main ways of investing in gold. You can try ETFs or Exchange-Traded Funds; there are gold stocks; and then you can buy gold bullion. Bullion is by far the best bet for beginners.
There are 2 kinds of bullion available: ingots and coinage. I recommend you begin with coins. Coins are simpler to buy and easier to sell than gold bars. On top of that, coins give you a lot greater flexibility when it comes to liquidating your precious metal holdings. For example, if you wanted to sell sixty percent of your gold holdings, it's more straightforward if you own twelve coins rather than a couple of ingots.
Do not spend a single penny before you make sure you can get the most advantageous deal available. Gold traders earn their profit from "the spread". This is the difference from when they buy for less than the market price and retail for more. This is subject to variation but often depends on the amount of gold, and the type of gold for sale. It can also depend on who the seller is.
Stay away from those gold vending machines. They have become common in malls and shopping centers all over the world and are aimed at investors who do not know what they are doing. No seasoned dealer would ever think of sourcing from a vending machine, and you shouldn't either.
Buying gold medals and coins is the most obvious way to go. Coins made from gold can be split up into two main kinds: numismatic and bullion coins. Bullion coins tend to be minted solely for the investment market, whilst numismatic coins are made to be used as currency and often have extra value apart from their gold composition. How much bullion coins cost is calculated on their gold content plus a mark-up of something like 5% to eight percent. This figure is generally called the "premium price". Typical investment gold coins include the Chinese Gold Panda, Malaysian Kijang Emas, French Napoleon, Canadian Gold Maple Leaf and Mexican Gold 50 Peso.
Commemorative coins are usually advertised with the suggestion that their value will rise over time. Sadly, this is usually not the outcome. The seller's original sale price for commemorative coins is nearly always higher than the gold content. Commemorating events like the 50th Anniversary of KFC or The Centenary of Jimmy Raison's Hanging rarely adds value to the coin itself. This is the reason almost all experts warn against speculating on commemorative coins.
I would often tell greenhorns to exclusively deal in bullion coins and search for those with the least premium over the spot price of gold quoted online. The 1 oz. Krugerrand from South Africa is the most popular bullion coin there is and almost always trades at the least premium over the basic gold price.
The cheapest location in the world to buy gold coins is Hong Kong. The Central Area of Hong Kong around Queen's Road is crammed with banks offering gold coins at amounts as little as 0.2% over the premium price. Needless to say, unless you are within walking distance, you would have to factor in air fares to see if a visit would be worthwhile. But if you are going anyway...
About the Author:
Once you know what you are doing, investing in gold can be simple and very lucrative. If you can't get to Hong Kong, knowing the best place to buy gold is important. Other options include dealing in scrap silver to raise extra money.
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