Strategy for Buying Gold and Silver [Global Nuggets Newsletter]
What’s your strategy for buying gold and silver? Maybe you never had one – here are a few tips on how to start
At MyGold, one of the most frequently asked questions by new investors interested in buying silver and gold is, "what should I buy? I don’t know where to start". The precious metals industry seems quite daunting at first. Visions of the film Wolf of Wall Street, with aggressive traders shouting ‘buy’ and ‘sell’, images of large gold bars being shipped around between central banks, stories of murky dealings – how does the average investor get into the precious metals industry? The answer is quite simple – it’s far more straightforward than might seem to be the case at the start.
Here are 3 basic principles we discuss with new investors at MyGold:
1. Go to a reliable dealer/retailer
Do a bit of research on which dealer you should approach. Read the reviews and, importantly, ask other friends who are familiar with the sector. Personal recommendation is always a great start. Check who the dealer is sourcing the product from. Are they an authorised distributor? Nationally owned mints and globally renowned refineries such as the UK Royal Mint, PAMP, Perth Mint, and the Royal Canadian Mint are a sure sign that products are reliable and fully authenticated.
2. Do your homework.
Silver or gold? New investors often ask this question. The answer is a question – ‘what’s your strategy going to be?’. Gold and silver behave quite differently – gold is more of a long-term haul with historically steady growth, while silver is more speculative. It’s worth reading up on the performance of both metals before deciding to go purely down a gold or silver route. Or a mix of the two.
3. One large gold bar or a mix of smaller ones?
This comes right back to the Strategy question. Imagine you want to invest $100,000 in gold. You have different options – you could buy a 1KG gold cast bar which, depending on price, would take you towards your target. OR You could buy approximately 32 x 1-ounce minted gold bars (or coins). The second option, despite a slightly higher cost per bar (pro rata), makes sense if you felt you might want to liquidate (sell back) some gold sometime in the future. In the example above, you could sell back 10 bars and keep 22. If you sold a single 1KG gold cast bar, you would have to liquidate all the investment, giving you less flexibility.
It is clear that every investor has a different ‘life plan’, so it’s best to create a plan (or strategy) for buying precious metals that work for you. Buying silver and gold is much simpler than many initially think. With the right strategy and buying from reliable sources, investors have confidence in entering the market with MyGold. If you want to learn more, we have an in-depth article covering everything you need to know about buying bullion in New Zealand: How to Buy Gold/Silver in NZ: The Ultimate Investors Guide
This Week's News
Here are a few nuggets from the world of precious metals this week: