When people hear the term “bullion,” they automatically imagine large rectangular bricks or “bars” made of gold à la films like The Italian Job and Goldfinger. But bullion is also available for sale in coin form. Investors prefer the former over the latter because they mistakenly believe that gold bars are more cost-efficient whereas bullion coins are in limited supply and prohibitively expensive. The truth, however, is quite different.
Even though gold bars present a more efficient method of purchasing gold, they are costly to liquidate. Also, liquidating gold bars involves other costs such as refining, assay, and handling charges. Bullion coins, on the other hand, present a better investment opportunity, especially when you consider the fact that they are deemed legal tender and enjoy favorable tax treatment in several jurisdictions.
Facts like these will come in handy when you’re trying to maximize the bullion value you receive for your money. After all, buying bullion is one of the best ways to invest your money and diversify risks. However, you need to implement a sound strategy if you want more bang for your buck. Check out a few other bullion investment tips below:
Consider Your Investment Amount
Purchase physical gold bullion when prices are low and sell them off when the rates increase – that’s the perfect strategy for investors. But implementing this strategy is more difficult than you think due to the unpredictability of financial markets. That’s why precious metals like silver and gold are commonly treated as long-term investments. If you manage to buy bullion while the price is slightly down, you’ve got yourself a good deal. But waiting for the turn of the market to buy gold is unwise.
Despite the risks, bullion is a permanent and worthwhile asset, one that moves separately from equities and other commodities, thereby allowing you to hedge your losses in other investment categories. Invest in small gold bars and coins when your budget is below $2,000.
Never Pay More for Bullion
If you want your money’s worth in bullion, you should probably avoid the high dealer markups and fees of the retail gold market. Moreover, in the light of market fluctuations, you must always be prepared to sell off your share of gold and get cash in exchange whenever necessary.
Approach a coin store that will provide this kind of flexibility at a moderate price. For example, you will find many coin dealers who allow you to purchase gold bullion online at wholesale prices. This means you no longer need to wait for the small bars or gold coins to be manufactured and delivered. Your investments – your allocated gold – are kept safely inside a professional vault. But you need to make sure the dealer offers delivery of the bullion in case you want to get your hands on the physical product itself. You should have the option of choosing whether you want your investments on your premises or avail the services of a vault.
Where to Buy Bullion: Online or Locally?
On paper, purchasing bullion either locally or online is nearly the same. You look at the available options until you find the product that suits your budget. Then you seal the deal by paying for the bullion.
In reality, however, there are lots of differences between online and local stores – enough to affect the overall customer and shopping experience.
The biggest difference between online bullion dealers and coin stores is accessibility. Sure, physical coin stores require you to leave the comforts of your own home, unlike online dealers. However, when you buy local, you get the opportunity to meet other collectors and investors. Plus, interacting with the people you are dealing with is a unique experience in itself. What’s more, you are able to take physical possession of the bullion you bought at the time of purchase. This means you do not have to wait around for your order to be delivered to your doorstep. Anyway, who thinks of convenience when pursuing a passion?
If you’ve bought stuff online before, you know how difficult it is to get hold of a customer service representative. Besides the never-ending waiting time, there is no guarantee that your query will be resolved instantly. You can do away with all this uncertainty when you head to a reliable local coin retailer, someone who has been in the business for quite some time and knows exactly what the customer wants.
Attention to Detail
Because the stores have a limited clientele, your shopping experience becomes a lot more intimate. You can approach the floor personnel for any assistance with your bullion buying needs. These people are knowledgeable about the subject and can help you get the best deals. Moreover, they understand that the reputation of their store hinges upon good customer service, and so they do not take any risks with customer funds.
Another reason why it is best to visit your local coin store is quality. These brick-and-mortar stores deal only with the largest and most reputable in the industry because they want no negative feedback from the community.
Impact on Economy
Small businesses have always been the backbone of the US economy. So, when you shop locally, you are actually contributing to the development of the country’s economic health.
Local dealers beat their online counterparts at one particular aspect – safety. When you’re purchasing bullion from a local dealer, you’re able to view the product before paying for it. So, you get what you pay for. Online businesses are unable to offer this facility. There is not much you can do if you get the wrong product from an online seller, other than contacting customer service.
Precious metals like gold and silver are solid investments but only if you purchase them in the right form. Bullion is 99.5 percent pure, which makes it a sound long-term purchase. However, you need to come up with a good strategy if you want to find the right bullion coins or bars for sale and get your money’s worth. Visit a reliable dealer to check what options are available to you.