Many investors want to invest in gold as a hedge against fluctuating stock markets and an uncertain economy. The 2007 economic debacle made investors realize the need to diversify their portfolio by adding a tangible asset like gold.
There are many ways to invest in gold, like ETFs, jewelry, bars, but the most popular is coins. However, there are many pros and cons of investing in gold coins, and you must be completely aware about certain things before you make a vital investment decision. This Buzzle article lists down 12 tips for beginners who wish to invest in gold coins.
Whether it is buying or selling gold coins, you should be aware about the fluctuations in the gold market. You should also keep abreast of the prevailing gold index.
If you intend to invest in gold coins to diversify your investment portfolio, do not invest more than 30% of your entire investment sum. Also, try to invest a minimum of 10% in gold coins.
Decide why you are buying the gold coins―as a tangible asset or for numismatic possession. This decision will dictate the amount of investment, type of coins and their value, and the returns on it.
As gold is a tangible asset, unlike mutual funds or stocks, you will have to take special care about storing the same. You can utilize a safe at your home, or a gold vault or a safe deposit in the bank to store your gold.
It is always better to buy a gold coin from a known brand as buyers are more likely to identify with it. You can go for South African Krugerrand Gold Coin, American Eagle Gold Coin, UK Sovereign, Canadian Gold Maple Leaf, Turkish Gold Coin, the Swiss Vrendi, etc.
Ensure that you buy a gold coin that has a market and is in considerable demand. This will help you get buyers easily for your gold coins.
Buy gold coins with a purity of 22k or 24k. The lesser number of alloys or other metal a coin has, the better price it will fetch.
Look at your investment goals before you decide where exactly to invest your money. Ideally, a mix portfolio of pre-1933 gold coins and bullion coins is recommended for beginners.
To avoid falling prey to fraudulent schemes, it is a safe bet to choose a gold firm that has been around for more than a decade and is interested in imparting information to you from time to time.
Investing in gold coins is less risky than gold futures contract where you can end up losing all your investment.
While there are reliable companies who trade in gold online, you can easily fall prey to real-looking counterfeit coins. Hence, it is always better to buy it physically from established gold firms.
Before investing in gold, conduct some basic research about the coins you intend to buy. You should also verify the size, mint origin, markings, weight, purity, etc. All this will enable you to make an informed decision.
Also, comparing the prices of gold coins with different dealers can help you get a better bargain. Hope you will make most of these gold coin investment tips for beginners.