- Buy On Logic, Not On Emotion- The last thing you want to do as an investor is get emotional, and this rule of investing is especially important when the investment in question is gold. Don’t allow something like a celebrity spokesperson affect your decision-making skills and allow you to get suckered into paying hundreds of dollars more per ounce than necessary.
- Don’t Buy Gold From The First Gold Dealer You Speak With After The First Conversation- It may seem like love at first sight, but some smooth-talking gold dealers are nothing more than snakes in the grass. Talk to a couple of different dealers and when you think you’ve found “the one” give yourself a night to think it over.
- Buy Gold from Companies That Use Non-Commissioned Employees- Companies that hire independent brokers to sell their coins and bars charge more and usually have worse reputations, since some brokers will stop at nothing to force a sale. Also, commissioned brokers are usually trained to push one type of gold coin or bar, meaning that your real needs may not be satisfied. Companies like the Certified Gold Exchange use an all-salary, non-commissioned workforce to help its clients.
- Invest In PCGS/NGC Certified Coins Or Internationally-Recognized Bullion Products- PCGS and NGC are the two industry-recognized coin certifiers you can trust, and if you are trading bullion then insist on bars manufactured by Johnson-Matthey, Engelhard, Credit-Suisse, AMARK and Ohio Precious Metals. Off-exchange products cannot provide the same assurance of authenticity and value that you get with brands like PCGS, NGC and Credit-Suisse.
- Demand Dealer Transparency- From the amount of money being made on the sale to details about the eventual buy-back of your gold, your gold dealer should be crystal clear with you. You need to understand what you are doing and why you are doing it, and it is your gold adviser’s job to help you figure that out. Reputable gold dealers use something referred to as an account agreement that clearly states the terms of each transaction.
- Buy Your Gold Outright & Take Physical Delivery- Some people criticize gold because it doesn’t pay dividends or earn interest, but the one things that gold has going for it is that it is gold. By not buying physical gold and having it delivered to you, you are wasting the advantage that one gains by owning gold. At the end of the day investments like gold stocks, gold ETFs, financed gold and gold derivatives are nice but they aren’t as nice as gold in your hands.
- Pay Your Taxes- Gold is a tax-deferred investment, meaning that if you sell your gold for a profit you must pay taxes on that profit. A competent CPA can tell you what the exact tax rate is in your area. Call it Caesar, Uncle Sam or the Tax Man, just make sure you pay the IRS what you owe them after you sell your gold for a profit. If you sell your gold at a loss or never sell then you have no capital gains taxes to pay.
- Become Familiar With The Buy/Sell Spread- The “buy/sell spread” is the difference between what a particular item costs and what you would receive if you sold it back to the dealer at the same time. The spread for bullion is usually 1-8 %, and certified coins have an 8-12% spread, although some firms that use celebrity spokespersons and/or commissioned brokers charge spreads of 15-35%. For certified coins, the spread is not the percentage above spot but rather the percentage above the buy-back price, which has always been higher than the gold spot price.
Recommended for you: Gold IRA Rollover Guide and Silver Investments.
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