An Introduction To Investing In Bullion

| February 4, 2016 | 0 Comments

A few weeks ago, we had a feature on selling vintage coins. As this showed, there’s a lot of potential in some of the old coins which are lying around your home. So what about buying coins? Every week, millions of gold bullion coins are sold to collectors and investors. Coins such as the Canadian Maple Leaf can prove to be a great investment, especially when the economy’s looking shaky.

canada-coin

Image from Wikimedia 

Before you buy a single gram of gold, you should be aware that there are certain drawbacks to this kind of investment. Prices fluctuate erratically compared to other alternative investments. Despite this, you shouldn’t really by buying and selling bullion at regular intervals. Once you have a coin, you should hold onto it for a minimum of three years to let the value grow. Another thing which throws modern traders off is the payment methods. Most precious metal dealers like PM Coins & Bullion will not accept credit cards, due to the clearing period for these transactions. If you can’t hand over the cash personally, then you’ll have to make a transfer or send a cheque.

If you think you’re up for it, then here’s where the tips start. First of all, stick to north American coins. Namely the Canadian Maple Leaf and American Eagle bullion coins. These are probably the easiest to buy and sell. Both coins’ purity levels are guaranteed by their respective countries’ mints, too. Which one you go with should depend on the country you reside in. If you’re in the US, then choose the 22-karat Eagle. The value you’ll get for these is generally higher in the US, but there’s another advantage. A lot of Americans aren’t aware of it, but American Eagle coins can be invested in individual retirement accounts (IRAs). Outside of the US though, your best choice is going to be the 24-karat Maple Leaf. Unless you’re a serious collector, stay away from coins like the Vienna Philharmonic and South African Krugerrands. You’ll find these much harder to buy and sell.

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Image from Flickr 

Finally, read the fine print and be a little suspicious. Every precious metal dealer is different in terms of buyback policies. Some of them may not even charge a premium. It always pays to draw up a list of different possible dealers, and investigate each one’s specific policies. Most gold bullion dealers are completely legit. Still, there are a fair amount of con artists operating around this trade. Whatever you do, don’t buy from telemarketers. Even if they are legit, they’ll charge completely outrageous commissions. There are other red flags you need to look out for. Dealers that offer free storage, or tell you to expect delays in your delivery, should be avoided like the plague!

Although a little more complex than other trading options, bullion can be extremely beneficial. Trading gold coins usually requires few purchases and sales spaced far apart. With each of these transactions, approach the whole thing slowly and with care. Make sure you understand the trade, and you can’t go wrong!

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Category: Investment

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