How to buy gold and silver?
September 25, 2010 by
Filed under Silver Investment FAQ
How to buy actualy gold and silver bar? is it a good investment?
September 25, 2010 by
Filed under Silver Investment FAQ
How to buy actualy gold and silver bar? is it a good investment?
It is a dumb investment, since gold and silver pay no dividends, need a place to be stored so they don’t tarnish, or if kept at the place of purchase, storage must be paid, meanwhile all hoping for continued upward momentum. Or you can just buy gold stocks or funds, and make it easy for yourself.
Buying the metals, to me, makes no sense. the transaction costs are high, transportation or storage costs are high.
Best way….. Buy the ETF;
GLD = Actual Gold
SLV = Actual Silver
Buy & sell at any time, each transaction will cost between $1.00 and $15.00 depending on what on-line broker you use.
Keep in mind “asset allocation”. I wouldn’t make my total purchase of these metals over 3% of my portfolio. Doing other wise would be a novices game, doomed to failure.
Most coin dealers can help you out if you want to purchase to actual metal. Gold has already doubled in the last four years and silver has gone up 5X in the same time period. Anybody looking to invest now has probably missed the biggest gains although some would argue otherwise.
If it was me I would invest in quality collectible silver and gold coins. The collectible value helps insulate the price a little bit from the movements of the commodities market. You can also get an interesting piece of history.
If you don’t know anything about coins always work with a dealer who has a good reputation and is a member of the ANA. This gives you some assurances that they working on your behalf and not just their own.
Gold is a good investment if you are looking to buy and hold for the very long term. The issue with gold and silver as an investment is the tax treatment. They are heavily taxed when you sell them for a profit. So if you want them as a hedge against inflation, you are better off buying the actual metal in small quantities (<$10k each transaction) so you don't create an IRS reportable "event". The transaction costs are high (~6%) for the gold bullion from a reputable dealer but that is MUCH cheaper than the taxes (30-40%!) on your gain. You can rent a cheap safe deposit box and store them there. You do NOT need to worry about them "tarnishing" if you buy bullion. A reputable coin dealer can sell this to you. Look for dealers registered with the US Mint as authorized resellers of their bullion product. I started buying gold bullion in $800-$1000 quantities monthly a few years ago. I have seen, on average, a 30% appreciation AFTER transaction costs during this time. No one knows if this will continue, but I am not selling.