Investing in gold is a wise investment move. It is a stable commodity that tends to do well during financially uncertain times. Gold prices tend to go up when the prices of stock prices are going down. Thus, gold can be considered as a great form of insurance. It also acts as the perfect protection against inflation. However, before you go out buying physical gold, you should be familiar with the common mistakes people make when buying physical gold.
1. Unrealistic expectations
Many precious metal investors are impatient and often tempted to chase the price with the hope of ‘hitting the jackpot.’ Most people believe that gold prices can only go up, and buy gold for short-term gains. Overnight success is sweet, but you shouldn’t wait to buy gold; instead, buy gold and wait. Investing in gold should be a long-term proposition.
2. Buying from the wrong sources
Buying from the wrong company is a common mistake that many new investors make. Most people who don’t know what a physical bullion looks like may end up buying a fake product from unscrupulous sellers. Other dealers use low dealer costs to lure unsuspecting customers, then switch tactics to trick buyers into buying other gold products at a higher premium. Follow these tips to avoid unscrupulous dealers:
- Stay away from deals that are too good to be true. If a dealer is offering a bullion product at an incredibly low price compared to current market prices, that’s a red flag. Most likely, it’s a scam to lure you in.
- Choose industry leaders. Reputable and experienced dealers like Gainesville Coins are undeniably more reliable.
- Do they have a Buyback Policy? It is highly unlikely that you will hold your gold forever. There will come a time when you will need to sell it, and the easiest way is to go through the dealer who sold it to you.
- A reliable dealer shouldn’t have problems accepting multiple forms of payment. They should accept credit cards, debit cards, cash, cheques, and others. Buying gold in the wrong form
It’s advisable to refrain from buying anything that is made out of gold. For instance, jewelry would give you a lot of trouble when you want to resell it. Likewise, you shouldn’t invest in scrap gold products, as few people will want to buy them from you. Most of these products are not pure gold, and are mixed with other metals.
3. Purchasing rare coins for investment purposes
The gold market is full of unscrupulous dealers trying to lure unsuspecting investors into buying numismatic coins. Don’t fall into their trap. Numismatic coins are not good investment vehicles, and are mainly for collecting.
Now that you are familiar with some of the common mistakes that people when buying gold, don’t go out buying blindly. Don’t invest in gold with unrealistic expectations. Remember, success is measured in years and not in weeks or months. Avoid buying rare coins for investment purposes and most importantly, remember to choose a reputable dealer.