Three Rules for Making a Winning Investment in Precious Metals / Commodities / Gold & Silver 2019
The questions first-time precious metals buyers ask mostoften are "what should I buy?" and "how do I get started?"We have covered these questions many times over the years, but they are worthreconsidering from time to time.
The very first rule of precious metalsinvesting is to avoid collectible coins and buy low-premium bullion(non-collectible) products instead. Well, to beprecise, it is actually those many shady rare coin dealers one needs to avoid.
The dealers to avoid are usually the ones heavily marketing onTV and radio using celebrity spokesmen, looking for inexperienced buyers. Theyknow what buttons to push. The ads talk a lot about real issues – concerns suchas the massive federal debt and the potential for U.S. dollar depreciation towipe out savings and wealth.
People call them, looking to do something smart and protectthemselves by acquiring some physical gold and silver.
Then the fast-talking salespeople go to work. They try andswitch people from making a simple investment in easy-to-understand bullionproducts, into buying dubious collectible and proof coins with a massive markup.
They talk about the huge potential for rare coins to appreciatein value and then sprinkle in some bogus advantages to make these items looklike a better option than lower priced bullion.
Our Specialists have heard it all from clients who sufferedthe sales pitches of these shady operators: lies like rare coins can’t beconfiscated; they are tax exempt; they have a record of outperforming bullionas an investment; bullion purchases must be reported to the government; etc.
All of these claims are nonsense, but thousands of newbieprecious metals investors are getting pitches like these every day.
Too many of these poor souls end up paying 30% to 50% above whatthe coins are actually worth, and sometimes even more. When they start that farupside down in their investment, who knows when they will break even?
Buying highly liquid bullion coins, rounds, and bars closeto melt value is the best way to go, period.
The second rule for making a good investment ingold and silver is just to get started.
Conventional investment advisors and stock brokers like to pokefun at metals as an investment. They aren’t serving their clients too well.
If the financial establishment stopped worrying about thecommissions and fees they get for pushing stocks, bonds, and mutual funds (i.e.paper), they might let clients know gold has vastly outperformed the S&P500 since 2000…
…they might acknowledge the U.S. government is insolvent, thefuture of the U.S. dollar is grim, and that these things have vast implicationsfor the fragile and deeply interconnected global financial system.
People need to prepare and they need to move quickly.
Anyone making a clear-eyed assessment needs to acknowledge the2008 financial crisis may just have been a warmup for the true reckoning yet tocome.
Putting 100% of an investor’s eggs in the Wall Street basket isnot a wise proposition, but that seems to be exactly what most financialplanners and brokerages are advocating.
It is not fashionable to worry about risks such as uncontrolledinflation, banking crises, and 50% stock market corrections at the currentmoment. Stocks are flying high and metals are cheap.
However,these risks, plus others, are real and growing. Now is not the time to becomplacent.The third rule for making a sound metalsinvestment is to choose your dealer carefully. Do abit of due diligence before placing your order.
Price is a consideration when comparing dealers. However, priceshould definitely not be the only consideration.
Buyers make payment in advance of receiving the gold and silverthey order. That means the dealer’s reputation and strength should also beevaluated.
Getting the lowest price will be scant comfort if the dealerdoesn’t deliver the metal. And there have been some ugly blowups of"low-price leaders" in our industry.
The BBB offers ratings and customer reviews for most dealers.Other websites do as well.
A quick internet search can reveal a lot about how thesebusinesses treat their clients. Pay special attention to any pattern ofcomplaints around dealers either not delivering or being slow to get ordersshipped.
By Clint Siegner
Clint Siegner is a Director at MoneyMetals Exchange,perhaps the nation's fastest-growing dealer of low-premium precious metalscoins, rounds, and bars. Siegner, a graduate of Linfield College in Oregon,puts his experience in business management along with his passion for personalliberty, limited government, and honest money into the development of MoneyMetals' brand and reach. This includes writing extensively on the bullionmarkets and their intersection with policy and world affairs.
© 2019 Clint Siegner - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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