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As central banks around the globe continue to devalue their currencies through loose monetary policies and the national debt in the US continues to escalate, more investors are looking to protect their assets by owning gold and silver. This also leads to an increase in the number of companies offering precious metals investments. We understand that you have options in the marketplace and we have created a short list of considerations the novice precious metals investor should keep in mind. |
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Unlike licensed investment advisors, gold brokers and dealers are not required to acquire or maintain professional licenses. Many companies in the industry have little if any education or broad-based market and economic experience outside of gold. Today’s markets are very complex. We believe that proper guidance requires an experienced professional to provide you the information you need to make a wise decision based on your objectives. We always recommend dealing with a company who employs professionals with diverse financial and economic experience and qualifications and, of course, extensive knowledge of the overall precious metals market. |
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No matter where you invest your money, there will always be costs associated with doing business. Different companies have different ways of making money. For one, when you are quoted a price find out what, if any, fees lay on top of the quoted price. Many people think that they find great deals on products only to find that what appears to be a great price is not such a great price when numerous fees or excessive handling charges are added to the price. Remember that if a deal seems too good to be true, it probably is. |
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Virtually every broker/dealer for every financial asset class makes money on a buy/sell spread. Meaning that if you purchase any asset from them whether it be a stock, mutual fund, or gold coin, they are selling the product for more than what they would be willing to immediately pay for it. This is the common practice in any industry but make sure that you understand the spreads. We strongly recommend that individuals avoid doing business with companies that do not disclose buy-back policies. Note that some dealers also charge liquidation fees on top of spreads. |
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Always make sure that the company selling you the product will buy it back at a fair market price. Note that some dealers do not even have buy-back policies or disclose spreads. Other companies are not well enough established or capitalized to repurchase products even if they do have a policy. Understand that the value of what you purchase can be greatly diminished if you do not have a relationship with an established broker/dealer who can provide you with an exit strategy. The lowest price does not always necessarily equate to the best value. |
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There are actually very few gold and silver coins relative to the number of investors. Make sure that if you if you pay for a certain product or coin, you are actually going to get that product. Again, if a deal seems too good to be true, it probably is. Many people have sent companies money to purchase a product at a great price only to find that the product is then out-of-stock and they are told to take different product that may not be comparable. |
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Avoid Companies that have a one-size fits all mentality. As noted on our coins web page, there are over 100,000 types of coins and at least four rough classes of coins. Different products can be drastically different in their performance, risks, and costs. Different products are more or less suitable for different objectives and risk tolerances. We recommend avoiding any company that does not offer a full line of products or claims that there is a “proper way” to invest in precious metals without taking into account the needs and objectives of each particular investor. |
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Very few precious metals dealers are licensed to store precious metals on behalf of customers. One should use extreme caution if a dealer offers to store precious metals for you. An authorized custodian generally holds precious metals directly owned by an IRA, and this should NEVER be the dealer. If owning precious metals through an IRA, take steps to insure that your dealer delivers your metals to the custodian’s storage facility. |
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You should be able to rely on an experienced precious metals broker for quality advice on the market and an opinion based on broad financial experience, but also understand the limitations to the advice a precious metals dealer can or should offer. A precious metals advisor cannot structure your entire investment portfolio, but can only offer information to help you build the portion devoted to precious metals. You should consult with your CPA or tax professional to understand tax consequences of any investment, especially when dealing with an IRA or qualified retirement plan. |
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If you are considering investing in precious metals, it is an important decision for you and should be important to your broker. Make a list of questions for your representative. If he or she is unwilling or unable to answer the questions within a short period of time, be wary. Our experienced precious metals advisors are willing to spend as much time with you as necessary to help you determine the suitability of precious metals for you and to help you make a wise investment decision. |
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