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Old 07-11-2012, 09:39 AM
 
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Default Questions about investing in Gold Bullion please

I listened to this Investment Counsellor on the radio yesterday that for people who are debt free and have a healthy sum of money saved...which is my case...that they should invest about a half of it in Gold and have the other half available as liquidity (money market, short term CD , etc..) .

My question about investing in Gold Bullion is :

1. How can you be certain the Bullion is PURE Gold without any form of deception taking place ?

2. Where would you typically store sayyy 10 of these Bullions in a safe place ? How much does each one weigh ?

3. Where are the best deals to be had in purchasing such ?

4. What precautions should a rather green Investor make or be aware of ?


Thanks much for your time in answering.
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Old 07-11-2012, 10:08 AM
 
Location: Chicago
2,055 posts, read 1,931,640 times
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Quote:
Originally Posted by 007.5 View Post
I listened to this Investment Counsellor on the radio yesterday that for people who are debt free and have a healthy sum of money saved...which is my case...that they should invest about a half of it in Gold and have the other half available as liquidity (money market, short term CD , etc..) .

My question about investing in Gold Bullion is :

1. How can you be certain the Bullion is PURE Gold without any form of deception taking place ?

2. Where would you typically store sayyy 10 of these Bullions in a safe place ? How much does each one weigh ?

3. Where are the best deals to be had in purchasing such ?

4. What precautions should a rather green Investor make or be aware of ?


Thanks much for your time in answering.
1. There are many different forms of Gold that you can invest in. You can buy real 1-10 ounce pieces, stocks that are representative of gold, Mutual Funds which invest in gold entities, etc. Buying PURE gold is actually pretty easy since its usually federally controlled, much like coins.

2. I wouldn't even buy real gold, but if you are set on doing so, then I would recommend a safety deposit box. Depending on your age, make sure you have a will in place as well as a planned executor of your estate.

3. you may be able to purchase pure gold from somebody looking for a quick buck. From where? Im not sure.

4. GOLD IS AN INVESTMENT. Do NOT forget this! I would say gold is just as safe if not less safe as investing in stocks. At least for long term. I believe gold has hit a bubble but the economy seems to be getting worse and currencies are weaker so it may not go down for some time. If you are LONG term, then gold is a bad investment. When currency is weak, gold price increases. Once the economy picks up gold will go down. So in the short term you may be safe, but long term its most likely a bad move.
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Old 07-11-2012, 11:32 AM
 
Location: Albuquerque
5,554 posts, read 8,808,289 times
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Quote:
Originally Posted by 007.5 View Post
1. How can you be certain the Bullion is PURE Gold without any form of deception taking place ?
Buy from a reputable dealer and not from a person not operating a store.
Quote:
Originally Posted by 007.5 View Post
2. Where would you typically store sayyy 10 of these Bullions in a safe place ? How much does each one weigh ?
10 of these Bullions? You mean 10 of these ingots, I'm guessing.

An ingot can be 1 gm ( 1/30th of an ounce ) to 400 ounces and in-between )
Even if you are buying $1 million in bullion, you don't need to buy anything bigger than 1 ounce.
The US, Canada, Australia, and many other countries make 1-ounce coin form ingots.
They also make them in sizes of 1/10th and 1/4th and 1/2-ounce sizes.

google the national mints of these countries.
You can see stuff here: 24-hour Spot Chart - Gold at the kitco site.
I go to this site every day and it is my first click.
Quote:
Originally Posted by 007.5 View Post
3. Where are the best deals to be had in purchasing such ?
The best deal is when the price is low. Don't go for a "deal" from some seller.
Go to one place and only that place so you know them and they know you.
They will sell you at the price shown on the above link.
If it drops $10/ounce from the time you check at home, you'll get the lower price.
If it goes up $10/ounce from the time you check at home, you'll pay the higher price.
Quote:
Originally Posted by 007.5 View Post
4. What precautions should a rather green Investor make or be aware of ?
(1) The price fluctuates widely.

(2) Lots of people hate gold and will think you are an idiot for buying it.

(3) Lots of people love it and think it is the answer to all bad investing.

(4) Buy something small and wait a month. Buy 1/10th of an ounce for your first purchase.
If you feel good about that purchase after a month, buy some more.

(5) If you buy a smaller coin than 1-ounce, you will pay far above the spot price.
For instance, if spot is $1,550, a 1/10th ounce coin might cost you $180 or so.
You also sell back the coin for a higher-than-spot price, but far less than you paid.

Note that there is nothing wrong with buying a smaller coin/ingot.
I have 1/10th ounce coins I paid less than $50 for.

(6) It is best to buy 1-ounce coins.

(7) The advisor was wrong. Putting 1/2 your money in any investment is insane unless you are an expert in that kind of investment.

(8) This is the most important thing:

Don't chase the price. Don't buy more than you wanted to because the price is going up.
Buy what you want when you want and as much as you want and can afford.
This isn't a trade for you. Physical bullion gets left to your heirs, in general.

You are not buying at $1,550 so you can make money at $2,000 if and when it gets there.

You are buying at whatever the price is because as the US government and other governments
keep creating "money" out of thin air, the price is going to double and double again and again ...

It was $35/ounce not long ago. In the same time frame, it will be $35,000/ounce.

Oh, and BTW, when it is $35k, you won't be able to buy a new car with that ounce.
The "value" of that ounce will be approximately the same as it is today. Very approximately.

Finally, note that the topic of this thread is about buying bullion.
If you had asked about buying gold in a brokerage account, most of the answers would be very different.
If you had asked about trading gold in a brokerage account, most of the answers would also be very different.

I think, in general, a person should not invest in gold without buying a gold coin first.

Last edited by mortimer; 07-11-2012 at 11:41 AM..
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Old 07-11-2012, 11:48 AM
 
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Really excellent advice. Many thanks.
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Old 07-11-2012, 12:19 PM
 
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There's dedicated website forums that will have more thorough information if you have a serious interest.

I'll PM you.

But if you're going the length to procure physical gold, you'd probably be of the mindset to avoid keeping it in a safety deposit box.
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Old 07-11-2012, 04:39 PM
 
Location: Albuquerque
5,554 posts, read 8,808,289 times
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Quote:
Originally Posted by Troof View Post
There's dedicated website forums that will have more thorough information if you have a serious interest.
For a rookie, it will be hard to wade through all the advice on when to buy and where the price is going.
The real topic here is how to buy it and what to look for. 007.5 has apparently decided to buy, but is bothered by the process.
Quote:
Originally Posted by Troof View Post
But if you're going the length to procure physical gold, you'd probably
be of the mindset to avoid keeping it in a safety deposit box.
I don't understand this. Why would someone buying gold "avoid" a safe deposit box?

BTW, I probably should have added that buying gold is not like buying jewelry.
If you spend $1,000 on a piece of jewelry and need to sell it back the next day,
you would be lucky to get $500 for whatever you bought - gold, platinum, diamond ...

Your dealer margin risk is only a few percent. There is market risk, of course.
It's possible that a bullion coin bought for $1,000 will be worth $500 in the future.
Since the topic is about buying bullion and not where the price will go, anyone
posting their thoughts on what they think the price will be in the near term is an idiot.
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Old 07-11-2012, 05:12 PM
 
362 posts, read 365,842 times
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"...I don't understand this. Why would someone buying gold "avoid" a safe deposit box?"




The mentality of one going the length to procure actual physical bullion differs from one who plays into the paper (ETF) gold game.

One who is that determined to get their hands on physical product typically likes to keep it close to them, away from any safe deposit box.
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Old 07-13-2012, 02:08 PM
 
Location: Albuquerque
5,554 posts, read 8,808,289 times
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Quote:
Originally Posted by Troof View Post
One who is that determined to get their hands on physical product typically
likes to keep it close to them, away from any safe deposit box.
I see. I get the theory, but I have always assumed that most people keep their physical gold in the box.

I've never seen an actual survey, so it's really just my assumption and your assumption.

Occasionally, I like to take my out of the box so I can take all my clothes off,
lay down, and see how much of my body I can cover with solid gold. ... (*)

... that might be too much information for the faint of heart ...

(*) Sadly, although I am not fat or large, the coverage is pretty scanty.
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Old 07-14-2012, 08:24 AM
 
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Quote:
Originally Posted by mortimer View Post
...................

Occasionally, I like to take my out of the box so I can take all my clothes off,
lay down, and see how much of my body I can cover with solid gold. ... (*)

... that might be too much information for the faint of heart ...

(*) Sadly, although I am not fat or large, the coverage is pretty scanty.

Based on your revelation, it sounds like Cialis could come to the rescue (?!)
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Old 07-14-2012, 09:42 PM
 
2,094 posts, read 824,775 times
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Quote:
Originally Posted by 007.5 View Post
I listened to this Investment Counsellor on the radio yesterday that for people who are debt free and have a healthy sum of money saved...which is my case...that they should invest about a half of it in Gold and have the other half available as liquidity (money market, short term CD , etc..) .
If that is their advice, I wouldn't listen to them.

I have gold holdings in a bank box somewhere. But I wouldn't buy it now. I got mine at $750 an ounce. Currently I feel there is more of a chance of a decline in the price of gold than another run. Despite world markets problems, and baring perhaps a meltdown in China, gold has had its run.

But...

Quote:
Originally Posted by 007.5 View Post
1. How can you be certain the Bullion is PURE Gold without any form of deception taking place ?
A reputable dealer of course. Plenty on the internet. I ordered mine from the internet to avoid state sales tax.


Quote:
Originally Posted by 007.5 View Post
2. Where would you typically store sayyy 10 of these Bullions in a safe place ? How much does each one weigh ?
Bank box of course.

Quote:
Originally Posted by 007.5 View Post
4. What precautions should a rather green Investor make or be aware of ?
Do more research. A few years ago I was a bull on gold. Now I'm looking elsewhere. Especially if you're listening to someone advising young people with cash to stay in cash or gold. You're young, you can be a little more risky. Cash/gold is for old people.
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