NEARLY EVERY ONLINE GOLD DEALER can provide a long list of viable reasons that an investor should purchase gold. This would include safeguarding against the devaluation of currency, diversifying a portfolio, and generating profits through capital gains. However, there are other factors to be considered before making the investment. Below are five essential factors every bullion investor should know about gold.
#1 Avoid Commissions Locating an online gold dealer is simple. They usually hold memberships in the PNG (Professional Numismatists Guild). This is essential because it certifies the dealer has significant financial worth and is currently adhering to all the regulations and rules set by the Guild. Reputable gold dealers sell bullion products at a small premium over the spot price. This is often based on a coin’s size. Alternatively, commissioned sales people may actually be telemarketers interested in parting the investor from his or her money. Avoid a commissioned salesperson at all costs.
#2 Available Options
Industry sources indicate that bullion investors should consider their need for liquidity in both long-term and short-term investment goals. Because of that, diversifying in a variety of gold bullion denominations makes it easier to purchase and liquidate the precious metal. In addition, purchasing various sizes of gold coins can help the investor achieve financial goals, especially when its spot price rises to a higher value.
#3 The Tax Advantages
Bullion coins can now be added to a self-directed IRA (Individual Retirement Account). This offers the investor an ideal solution for protecting retirement assets. In addition, this option provides the opportunity to purchase bullion gold coins using pre-tax dollars. A self-directed IRA that contains gold will require an IRA custodian or trustee. Even so, it offers significant benefits and greater flexibility when the investor can trade in precious metals along with mutual funds, CDs, bonds, stocks and other trading instruments.
#4 Capital Appreciation
As stated in the newsletter referenced earlier, gold continues to be the ideal hedge against inflation. In fact, historically it always has. Gold remains extremely strong, and tends to increase in value any time stocks become volatile. However, gold stocks tend to be a riskier investment. This is because it is actually an investment in the strength and profits of the gold mine, and not actually the value of the gold it brings up out of the ground.
#5 Minimal Risk
Gold bullion coins, rounds and bars carry only minimal amounts of risk. Unlike stocks that can lose all their value, the worth of gold is highly improbable to ever be zero. Gold bullion is poured in its purest form at 99.9% purity. It can easily be converted into cash at locations all around the world. Because of its high price per troy ounce, it is easy to transport, store, and be passed down to the next generation without government intrusion or knowledge. A successful investment portfolio is one that is diversified with various trading instruments, which can include gold bullion rounds, coins and bars. In fact, gold continues to be relatively scarce and serves as an effective means for preserving and storing wealth.
ABOUT THE AUTHOR:
Rianne Hunter is a mother of three, avid blogger, and finance dabbler from Southern California. She keeps tabs on the market through many channels like Money & Markets Stock Newsletter and other industry sources.