There are so many companies that have jumped on the gold bandwagon. And why not, what other commodity or investment has doubled in value in the last 4 years? But all Gold investments are not equal. It’s difficult to say what is the perfect way, but I do know 5 ways not to buy gold.
1. Paper Gold
There are a lot of companies offering and advertising “gold shares” or “gold certificates”, etc. These are nothing more than ETF’s (Electronically Traded Fund) that store gold or shares of gold mining companies, sometimes even indexes that track gold prices. While they may be valid investments, if you are looking to invest in gold, the whole point is to diversify away from the traditional market.
2. Gold Storage Firms
The first place a bankrupt or corrupt government will go to resolve it’s insolvency is it’s foreign held gold. If you own gold, and it’s stored in a foreign country your gold is the first that is going to be seized. Or similar to the situation with Swiss logistics company ViaMat for over 60 years they have been the gold standard in gold storage. And because of IRS regulations, and an insolvent government looking to leech as much in taxes as possible, ViaMat has discontinued services to all United States customers.
3. Fractional Coins
These are coins that come in fractions of an ounce, such as 1/4, 1/2 and even ridiculously small 1/20th of an ounce. You will always pay a premium for these coins. The only valid reason to buy them is if you are a prepper, and believe an end of the world scenario where paper or fiat money will be toilet paper, at which you will need small change to buy ammo, or supplies. And at that I would recommend buying junk silver coins such as pre-64 US coins.
4. Unsolicited Sales Call
The FTC (Federal Trade Commission) has reported a huge spike in scammers soliciting unsuspecting buyers making inflated claims about the profit margins on gold, such as “doubling or even tripling your money in 4 weeks.” These same people will couple warnings about the potential collapse of the stock market, and how your gold could be less risky investment
The first clue this is not a legitimate offer is if you have registered your phone number with the National Do Not Call Registry, but they called anyway. Dama Brown, staff attorney for consumer affairs in the FTC’s Atlanta office, says “It surprises me, the number of people who will go ahead with a sale when dealing with someone who has already violated the Do Not Call list.”
If you do decide to buy gold, and you understand the risks of gold or other precious metals. I recommend you buy physical gold. We do have a couple of advertisers that sell gold. We wouldn’t allow them to advertise if we didn’t trust them. If you aren’t comfortable buying from a website find a local reputable company that you trust. Ask your friends where they buy their gold.