Tips for Buying Gold
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Precious metals have long been known to be one of the safest investment vehicles. According to a study by Forbes, precious metals like gold not only give investors tax advantages, but also diversify portfolios.
One of the biggest advantages of adding some glitter to your portfolio is the fact that gold rarely succumbs to inflationary pressures. Even when other securities are underperforming, precious metals retain their value—a win-win situation for investors.
In this post, we’ll discuss some easy tips that ensure a profitable gold investment:
Make sure the gold is pure
Your investment will only bear fruits if the gold in question is pure. Gold gold scams are very common, which makes vigilance very important.
No matter what reason you’re buying gold for, purity is non-negotiable. Always look for references when you’re choosing a dealer. The purity of gold is measured in carats per thousand grams. The purest form is 24-carat.
If possible, take someone experienced along with you at the time of purchase. Always look for markings on the coins and bars. If the gold bar has been tested for purity at a laboratory, the lab’s logo/mark should be present somewhere on it. You can check the logo against the lab’s website to cross-check.
To make things simple, always go for hallmarked products.
Pick the right bar size
The gold bar that fits your needs depends on the purpose of your purchase.
Gold bars come in all shapes and sizes. They can be as small as a gram or as big as 400 ounces. Never fall for the myth that a bigger bar will guarantee a bigger premium. You’d be surprised to know that small gold bars offer better divisibility. Don’t know what that means? Allow us to explain.
Imagine you’ve held gold bars in your portfolio for quite some time and are looking to sell them. It’s not easy to find a buyer with buying power to buy a huge bar. This means smaller bars have a more liquid secondary market. If you have multiple small bars, you’ll be attracting a bigger pool of customers.
Get a precious metals IRA
Storing gold at home is a lot riskier than you’d think. Not only is it highly susceptible to theft, but the bars can also get damage.
But with a precious metals IRA, all you have to do is look for a financial institution that will hold gold bars and coins in an IRA. If you don’t have a precious metals IRA, get your normal IRA rolled over to a precious metal IRA.
The biggest advantage of doing so is that the institution will keep you updated about the latest trends in the market and guide you regarding the tax benefits of IRAs.