Pundits sometimes say "diamonds are a girl's best friend", but believe me, it's not easy to out-perform gold. Buying gold and other precious metals is the best idea during a recession. Although the interest rates offered by banks are low, the value of gold goes up constantly.
There are several main ways of putting your cash into gold. You can try ETFs or Exchange-Traded Funds; there are gold shares; and then there's the option of purchasing the gold yourself in the form of bullion. Bullion is by far the perfect choice for the beginner.
There are 2 kinds of bullion available: ingots and coinage. I recommend you begin with coins. Coins are simpler to buy and easier to sell than gold bars. On top of that, coins give you a lot greater flexibility when it comes to liquidating your precious metal holdings. For example, if you wanted to sell sixty percent of your gold holdings, it's more straightforward if you own twelve coins rather than a couple of ingots.
Do not spend a single penny before you make sure you can get the most advantageous deal available. Gold traders earn their profit from "the spread". This is the difference from when they buy for less than the market price and retail for more. This is subject to variation but often depends on the amount of gold, and the type of gold for sale. It can also depend on who the seller is.
Keep clear of gold bullion vending machines. They are springing up in shopping centers and malls in many parts of the world and are aimed at investors who do not know how to get bullion. No seasoned dealer would ever think of getting from a bullion machine, so follow their example.
Getting hold of gold coins is the most obvious first step. Coins made from gold can be divided into a couple of main types: numismatic and bullion coins. Bullion coins are often minted solely for investment purposes, whilst numismatic coins were made as currency and often have an added value aside from their gold content. How much bullion coins are worth is calculated on their gold content plus a margin of roughly five per cent to 8 per cent. This difference is generally referred to the "premium price". Typical investment gold coins include the Austrian Philharmoniker, American Eagle, French Napoleon and American Buffalo.
Commemorative coins are usually sold on the indication that their value will rise over time. Sadly, this is usually not the outcome. The mint's original selling price for commemorative coins is nearly always significantly higher than the gold content. Commemorating events like Hitler's Birthday or The Centenary of Jimmy Raison's Hanging does not often add any value to the coin itself. This is the reason almost all experts warn against buying commemorative coins.
I would often tell greenhorns to exclusively deal in bullion coins and search for those with the least premium over the spot price of gold quoted online. The 1 oz. Krugerrand from South Africa is the most popular bullion coin there is and almost always trades at the least premium over the basic gold price.
The cheapest location in the world to buy gold coins is Hong Kong. The Central Area of Hong Kong around Queen's Road is crammed with banks offering gold coins at amounts as little as 0.2% over the premium price. Needless to say, unless you are within walking distance, you would have to factor in air fares to see if a visit would be worthwhile. But if you are going anyway...
There are several main ways of putting your cash into gold. You can try ETFs or Exchange-Traded Funds; there are gold shares; and then there's the option of purchasing the gold yourself in the form of bullion. Bullion is by far the perfect choice for the beginner.
There are 2 kinds of bullion available: ingots and coinage. I recommend you begin with coins. Coins are simpler to buy and easier to sell than gold bars. On top of that, coins give you a lot greater flexibility when it comes to liquidating your precious metal holdings. For example, if you wanted to sell sixty percent of your gold holdings, it's more straightforward if you own twelve coins rather than a couple of ingots.
Do not spend a single penny before you make sure you can get the most advantageous deal available. Gold traders earn their profit from "the spread". This is the difference from when they buy for less than the market price and retail for more. This is subject to variation but often depends on the amount of gold, and the type of gold for sale. It can also depend on who the seller is.
Keep clear of gold bullion vending machines. They are springing up in shopping centers and malls in many parts of the world and are aimed at investors who do not know how to get bullion. No seasoned dealer would ever think of getting from a bullion machine, so follow their example.
Getting hold of gold coins is the most obvious first step. Coins made from gold can be divided into a couple of main types: numismatic and bullion coins. Bullion coins are often minted solely for investment purposes, whilst numismatic coins were made as currency and often have an added value aside from their gold content. How much bullion coins are worth is calculated on their gold content plus a margin of roughly five per cent to 8 per cent. This difference is generally referred to the "premium price". Typical investment gold coins include the Austrian Philharmoniker, American Eagle, French Napoleon and American Buffalo.
Commemorative coins are usually sold on the indication that their value will rise over time. Sadly, this is usually not the outcome. The mint's original selling price for commemorative coins is nearly always significantly higher than the gold content. Commemorating events like Hitler's Birthday or The Centenary of Jimmy Raison's Hanging does not often add any value to the coin itself. This is the reason almost all experts warn against buying commemorative coins.
I would often tell greenhorns to exclusively deal in bullion coins and search for those with the least premium over the spot price of gold quoted online. The 1 oz. Krugerrand from South Africa is the most popular bullion coin there is and almost always trades at the least premium over the basic gold price.
The cheapest location in the world to buy gold coins is Hong Kong. The Central Area of Hong Kong around Queen's Road is crammed with banks offering gold coins at amounts as little as 0.2% over the premium price. Needless to say, unless you are within walking distance, you would have to factor in air fares to see if a visit would be worthwhile. But if you are going anyway...
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Occasionally you can find a genuine bargain on Ebay, which may not be the very best place to buy gold but sometimes you can get lucky. I can also recommend scrap silver as a way of hedging against recession.
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