There are many arguments in favour of investing in gold, not least of which includes:
- It’s a potential hedge against inflation
- It has intrinsic value
- Fear of future hyper inflation
- Quantitative Easing eroding currency values
- World Recession
- Gold’s impressive performance since records began.
The most pessimistic of advisers recommend a 2% – 5% holding of gold in any investment portfolio and the most optimistic, a 5% – 20% holding.
Whichever camp one falls into, two of the most difficult questions to answer are: what type of gold should one buy (e.g. coins, ingots, bars, funds, stocks, IRAs etc) and where should one purchase them from? The purpose of this article is to deal primarily with the second question – where to purchase the gold.
The purchaser of this valuable commodity has a plethora of options and areas from which to purchase. It would be unfair to single out just one location, as there are a small number of online sites which offer a good secure arrangement and price. So instead, this article highlights those essential criteria one should consider prior to purchase.
The essential criteria are:
- Is the company a major organisation with a sound track record of performance?
- Preferably is it an INC 500 company?
- Does it have a BBB (Better Business Bureau) A+ rating?
- Does the company offer a range of bullion purchase and storage options?
- Are the prices charged within a reasonable percentage of spot price?
- Will the company buy back your purchases again at a reasonable price?
- Gold IRAs: Does it provide the facility of investing in an IRA?
- Does it provide an opportunity to purchase and sell other precious metals?
There are other important considerations, but these are the main ones before entertaining any purchase decision.
To support the suggestions and comments above, it is worth considering the words of the following internationally renowned Billionaires:
- John Paulson (over $4.6 billion invested in gold)
“I view gold as a currency, not a commodity. It’s importance as a currency will continue to increase as the major central banks around the world continue to print money.”
- Seth Klarman (over $1 billion invested in gold)
“There are no easy ways to navigate these turbulent waters. But because the greatest risks are of currency debasement and runaway inflation, protection against a currency collapse – such as exposure to gold – and against much higher interest rates seem like necessary hedges to maintain.”
- Mikhail Prokhorov (over $6 billion invested in gold)
“We’re looking now at what the world financial system is going to do with all this money that was printed during the financial crisis, if there’s continued inflation, we’ll see a global trend for raw materials and gold is not an exception. I’m optimistic that the gold price will stay at the same price or higher.”