What type of gold is for you?

You may be a seasoned investor who has already reaped some of the many benefits that come from adding precious metals to your portfolio. Maybe you are just curious as to how and where to begin. Should you add gold to your portfolio, and if so, which type should you purchase? What should you buy first? With so many dazzling choices, this may be the most difficult task you face. How much should you start with? Who should you purchase from?

If you are asking yourself some of these questions, the first step is to determine your investment goals and educate yourself on today’s market, either on your own, or with the assistance of a knowledgeable dealer. Reading this guide is a great place to start! Familiarize yourself with the industry and get some real numbers. Ask your dealer for figures relating to products that yielded the highest returns in the last 1, 3 and five years. Be informed. Sharp investors look for financial safety, privacy and growth when making investment decisions.

If you decide to purchase bulk gold, or bullion, it will come in the form of bars or coins. The value of bullion lies intrinsically in the metal content alone, value based on rarity does not apply to bullion for it is the most widely traded form of gold and continues to be produced. Some new investors choose to start with bullion at the onset of their gold venture. Bullion coins are generally better suited to short term investments, since it is the least expensive form of gold and has a tighter spread. In other words, you pay close to the actual rate of gold when you initially purchase it. This allows you to sell it back at market price soon after with little loss and potential gain, depending on current market conditions.

Perhaps you are drawn to the rare coin market, which can be far more lucrative. Investment grade gold, certified gold, or rare US coins, are considered semi or numismatic coins. Many investors are attracted to the double investment benefits of these historical coins that not only rise as their intrinsic metal content appreciates, but also increase due to their collectible value. Certified coins have consistently outperformed gold and silver bullion. For 35 years, investment grade gold has consistently been one of the top non-leveraged investments in the world. In fact, even when the price of gold has dropped, rare coins have continued to thrive. The reason behind this is that supply, demand, and dealer inventories affect the price far more than the price of gold. Value is also determined by the condition and scarcity of the coins.

The good news is that you do not have to be an experienced numismatist to safely deal with these exceptional pieces. No expertise is necessary to determine the fakes from the “real deal”, or make the finest distinctions in grading which could result in hundreds to tens of thousands in pricing thanks to the arrival of respected grading services, such as NGC or PCGS in the late eighties.

The following questions may help you determine what type of gold matches your goals?

1. Do you plan to hold your gold for one year or longer?
2. Are you concerned with privacy issues?
3. Is adding diversification of significant importance to you?
4. Is having physical possession of extreme importance to you?