Every big decision is made up of many tiny decisions. Whether you're buying a car, opening up a new bank account, selling your home, or securing your future with precious metals, one misstep could cost you valuable time and money. When it comes to this last major financial move, we can help. Learn how you can better protect your gold purchase and your financial security by avoiding these little-known gold buying mistakes. The more you know, the better you can prepare for whatever the world throws your way.
Mistakes People Make When Buying Gold
Mistake #1: Only buying gold when it's popular
There's never a “wrong” time to buy gold. In general, though, when everyone else is buying gold coins the price of gold can go up and coins can sell out. It's basic supply and demand. Demand refers to how much a product is desired by buyers. Supply refers to how much the market can offer in response to that demand. As demand for a product increases, whether it's gold, grain, or gas, prices rise and supply can become more scarce.
If you only buy gold when it's the “in” thing to do, you could miss out on certain gold products and lower gold prices. It's happened before. For instance, in 2009 the U.S. Mint ran out of its bullion inventory of the 1 oz. Gold American Eagle. Demand was so great that the Mint couldn't make the proof version of the coin. Similar sellouts have occurred with the Gold American Buffalo Coin, the U.S. Mint's first .9999 pure 24-karat gold coin. The Mint stopped production during the financial crisis of 2008, ran out of 1 oz. bullion inventory in 2010, and sold through their 1 oz. proof inventory in 2015.
Avoid this mistake: There's not necessarily a “bad” time to buy gold. Depending on your reasons for buying gold, though, certain times could prove better than others. Start by identifying your reasons for buying gold and your financial goals. This information will help you avoid the little-known mistakes to come, influence the types of gold coins you buy, how much gold you buy, and the timing of your purchase. Oftentimes, savvy gold buyers will buy during less popular times to take advantage of lower prices and greater product choices.
Mistake #2: Buying just one type of gold coin
Buying only one type of gold coin is like eating only one type of vegetable. Broccoli is good for you, but you wouldn't rely on broccoli to sustain your body and give you all of the nutrients you need to stay healthy.
In the same way, you can't rely on one type of gold coin to give you a strong, healthy portfolio. Gold coins differ in so many ways, including origin, size, design, purity, and reputation. Typical sizes range from 1/10 oz. to 1 oz. Designs can be patriotic, nature/music-inspired, or pay homage to an important historical event/person. It’s these unique differences, along with many others, that give each coin its own strengths.
A combination of gold bullion coins and gold proof coins can help your portfolio weather the good times and the bad, just like a diet filled with broccoli, carrots, squash, green beans, and other nutrient-dense veggies helps your body fight illness and stay healthy!
Avoid this mistake: Buy gold coins that match up with your financial goals. If you're not sure what that looks like, call one of our Account Executives at 1-844-307-1589. They can help you understand how different gold coins, along with various precious metals, can help you achieve your goals.
For instance, if you anticipate using your gold as money in the future, you may want to buy smaller 1/10 oz. gold coins since they're light, mobile, and may be easier to transact with. If you plan on passing gold down to your children, you may want to buy proof gold coins that have been examined and graded by a professional grading service. Due to their rarity, grading, and insulation from spot market volatility, certified gold coins can achieve greater potential when held for longer periods of time. By nature, their scarcity allows for increased potential.
Mistake #3: Buying from an unreliable source
Many gold buyers make the mistake of buying from whoever's selling, especially when there's a market frenzy. Buying from an unknown or unverifiable source can leave you the victim of a scam, with fake gold or no gold to show for it.
Avoid this mistake: Watch for red flags! According to Consumer Affairs, gold dealers that offer free storage or delayed delivery may not be legitimate, and you may never end up seeing the gold you paid for. Craigslist, pawn shops, and cold callers are also three types of sellers to avoid, they add.
Research your gold company to ensure that they have the proper affiliations, a track record of satisfied clients, a BuyBack Guarantee you feel comfortable with, secure shipping, and personalized service. U.S. Money Reserve, for one, has been in business for over a decade and remains the only gold company led by a former U.S. Mint Director. Now that's a reputation you can count on.
When you've found a company you're interested in working with, contact them and consider the following:
- Is the company's contact info easy to find and do they answer when you call?
- Does the representative take the time to understand your personal financial goals?
- Do they take the time to answer your questions about precious metals and educate you about the industry?
If you can't answer “yes” to these questions, keep looking. Honest and knowledgeable gold companies do more than sell gold. They provide market insight and take the time to help clients build a portfolio that supports their financial goals.
Request U.S. Money Reserve's free Gold Information Kit to learn more about the advantages of owning physical gold. The more you know, the more you can benefit from owning gold!
Mistake #4: Advertising your purchase
Once you've bought gold, it can be tempting to share your experience with friends and family. After all, buying gold coins is exciting! While you should be proud of the steps you've taken to secure your financial future, be cautious of who you talk to about your gold. You may inadvertently put yourself in danger.
Avoid this mistake:Think twice before posting about your purchase online, whether on social media or on a blog. Theoretically, anyone, anywhere in the world could search your name within a social media network and see what you're posting. Store your gold in a secure location, like a safe, safety deposit box, or precious metals depository and limit the number of people who know about your gold.
If you’ve still got gold questions, we’ve got answers. Call an experienced Account Executive at 1-844-307-1589 today to start planning what could be your best financial future.