Investing in gold, is often scary for beginners.
The trick for making any successful investment is knowledge.
Knowledge and perhaps a little luck along the way and you can avoid many of the investment horror stories you’ve likely heard about.
Gold Certificates: What You Need to Know
Gold is always gold. It will always have intrinsic value. No matter how much you pay for it today – it will dip down occasionally – but it will also always rise to the same value it was before the price dip – and eventually the value will rise even higher.
Need proof? Check out the last 10 years Gold prices.
Consider supply vs. demand: the demand will always be there, yet the supply will always go down.
The same can’t be said for fiat dollars. When supply gets low, the respective mints around the world simply print more of them. That’s inflation at work.
Investing in Gold Doesn’t Have To Be Difficult, Even if Your a Beginner..Just Do Your Homework First
Don’t Count on Your Dollars
China and Russia are currently working together to topple the USD as the reserve currency. China is currently (as of 2014) the world’s largest gold importer. They also own a massive chunk of the United States’ debt currently.
Russia’s the largest oil exporter.
Both are in favour of a commodity-backed global reserve currency. Which means fiat dollars potentially won’t mean squat someday soon.
Gold will always have value. It’s real and valuable, rare, desired ever since it was first discovered.
Physical or Certificates?
When buying physical gold, such as bullion (coins and bars) or jewellery, always consult an expert before pulling out your wallet. There are tons of scams out there.
Gold-plated tungsten is one of the most popular, and often hardest-to-spot investing scams for beginners.
Just read this article to learn how easy it is to lose $10,000 dollars in an instant buying illegitimate physical gold: Gold Plated Tungsten Found In Manhattan. This’s just one example. Many world banks, gold dealers and depositories have been duped by this scam.
Storing your own gold might sound like a great idea. But we can’t all be like Ted Binion; with a massive immovable vault buried under the sand in the desert.
Storing it at home or some other un-guarded place is a recipe for disaster. Robberies happen all the time. Plus insurance companies aren’t going to cover you for very much weight, unless you have bank-level security installed.
Safe deposit boxes are small and expensive. The largest typical box you can rent will cost $200 a year (with dimensions of 10” x 10” x 24”.) Not much room. Most banks will not insure the contents of your box and you can only get at your gold if their doors are open.
Physical gold that you hold in your possession isn’t immediately liquid. Whether coins, jewellery, or bullion; you’ll need an appraisal and a buyer.
With an allocated certificate (keep reading to learn more) you own the gold attached to that certificate.
The dealer will usually allow purchases in “Troy Ounces” or “Kilograms”.
Legitimate certificates from trusted institutions are very easy to sell.
Keep in mind that most banks and dealers will have a minimum order size (usually ⅛ of an ounce or higher.)
Choosing a Repository to Buy Your Gold Certificates
As a new gold investor, you want to start out safe by purchasing a gold certificate. You will want to create an account with a reputable dealer with an impeccable reputation.
Read as many reviews as you can before diving into the pool.
If they’re new, or don’t have a reputation, walk away.
Not all gold certificates are structured the same. Be extra diligent with your choice.
Unallocated vs. Allocated
You can learn more here about the unique differences between the two. As a beginning investor, you do NOT want to purchase unallocated gold certificates. This is the most common investing mistakes one can make in gold. Specifically for beginners, the cards are stacked against you in this part of the market.
Don’t try running before you learn to walk without falling flat on your face…
There’s a massive risk attached and if you’ve heard about different gold scams out there, they usually all start with people buying unallocated gold holdings.
Some basic food for thought on unallocated certificates:
You don’t own unallocated gold.
It cannot be insured.
You can’t withdraw your gold and move it if something happens to the depository where it’s held.
The bank, dealer, brokerage who sells you the unallocated certificate can go broke if the price dips too low in the market; if they go broke your investment is gone.
There’s big money to be made from legitimate unallocated holdings, but this is territory that only the seasoned investor, with a hefty dose of risk tolerance (ie., extra cash to burn) should try.
Though you won’t have the gold in your physical possession, you do actually own it.
Allocated gold will have a serial number (bullion bars) or unique identifier (coins) registered to your name, the minute you purchase it – much like the IMEI on your cellphone, or the VIN on your automobile.
Allocated gold is registered to you, the certificate holder.
You will pay a monthly/yearly storage fee – it’s yours, you own it – storage isn’t free.
Your gold is insured – reputable dealers will charge you for this insurance.
You can move the gold you own at any time and move it to another depository.
If the price goes down (even drastically) you simply hold your gold until it goes back up again (ie., you’re not at the mercy of the broker and temporary market fluctuations that can topple them if they’re unprepared.)
Are you ready to get started?
Hopefully this has been an informative starting point for you. The key to investing in gold for beginners is to arm yourself with as much information as possible.
Remember that gold is better than money and certainly more stable.
When/if paper fiat money is gone, gold will still be there to protect you and your family.
Just remember that there’s only so much of it left to go around!Dan Craig