So you're ready to buy some gold bullion. Excellent! This article is all about the process of buying gold bullion coins, one of the most exciting parts of investing in gold. One of the best parts of investing in physical gold is taking delivery of your coins and holding them in your hand. While the process may seem intimidating at first, there really is nothing to be worried about as long as you keep a few high level rules in mind. Don't get me wrong, gold is expensive and you have to exercise caution buying gold coins just like you would with any other investment. However, once you know a few simple rules, you will be a gold buying pro.
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Buy Gold From Reputable Shops
The first and primary rule in buying gold bullion coins is to always go with reputable shops, even if it costs you more money (which it usually will). How do I define reputable? It is really subjective but the key is to search for gold dealers that have been in business a long time. One of the oldest and most reputable gold dealers is Blanchard & Company. They have been selling gold coins for over 30 years and employ 85 professionals. I feel that gold dealers on this scale are worthy of your trust. Others in the same league include Kitco and Monex. There are certainly other fine gold dealers that I am not listing here that you should not ignore just because they didn't make it to the article. The key is to learn about the company history before buying from them. How long have they been in business? How large is their operation? How many employees? How much service are they giving you? Are they willing to hold your hand and teach you about gold?
Reputable Gold Stores Don't Have To Be Big
Some reputable gold store operations are not on the scale of these mega gold dealers. A perfect example is your local coin shop. Your local coin shop is a great place to buy gold, especially if they have been in business for a long time. One great sanity check is to go online and search for your local coin shop on Google. Are there any negative reviews? If so, this may present a red flag. The great thing about buying gold from your local coin shop is you can do so completely anonymously if you wish. You can walk in the store with cash and walk out with coins, not having to report anything. With the larger stores listed above, however, you may have to deal via mail which means you will be sending in checks and linking yourself to the purchase. It's all a matter of your personal objectives, but this is one arena that local coins shops have an upper hand versus doing business via mail.
Don't Choose Just One Gold Store
I'm all about hedging my bests and diversifying away risk. This is one of the main reasons I invest in gold: To diversify my assets into a store of wealth that will appreciate as some of my other investments depreciate. Taking this concept to the next level, there is no reason to be loyal to any one gold shop. In fact, I recommend against this because you are taking on risk by buying gold from only one source. Despite your best efforts, what if you end up getting some fake gold coins from a certain gold store? If you buy from multiple sources, you significantly hedge your bets against this horrible scenario. I think it's very unlikely that you end up with fake gold coins after performing the screens above, but it never hurts to take the extra precaution of diversifying. For more on my diversification strategy, you may wish to check out my article on diversifying within your gold coin portfolio.
Taking Delivery of Your Physical Bullion
Ok, so now you've decided which gold shops to do business with. Now, it's time to place your order and take delivery of your bullion. This is the fun part! If you are doing business with a company over the phone, such as one of the large ones listed above, you may get assigned to a specific sales rep who will handle your account each time you purchase gold. It is great to get some personal attention to your account. Your rep can answer many questions you may have about the buying process and also which specials the company may be offering. One you have your rep, it's time to place your order. As soon as you place your order, you lock in a price. All volatility in the price of gold after your locked in price does not matter. Once you lock in a price, you are giving your word that you will be buying the gold and are entering a contract with the seller. Next, you will mail in a check which is usually held a few weeks for the money to clear before your bullion is mailed to you. After about two weeks, you will receive a call from your account representative letting you know your bullion is in the mail. Bullion is best shipped USPS insured mail and most reputable dealers use this means of shipping. USPS is the safest way to mail bullion, at least this is what I have heard from the gold dealers I have spoken to. Next, you will receive your gold in the mail. Once you have your gold, don't forget to store it in your safe deposit box. The power of gold is that a lot of wealth can be stored in a very small coin. This power is also a risk because theft is very easy. Place your assets in a safe deposit box and you will sleep better at night. Buying coins from your local coin shop? The process is much simpler. My suggestion is to walk into the store with cash and walk out with your coins. Then, go straight to the bank to store the coins in your safe deposit box.
Don't Buy All Your Gold At Once
The price of gold has been trending up over the past several years. Moreover, I believe we are just getting started and the price will go much higher. However, as with any investment, the path is not a linear one. There will be corrections along the way, some major and some minor. To avoid buying all your gold at a price peak, I suggest dollar cost averaging. Dollar cost averaging means you buy your gold in chunks over time. Spreading out your purchases over time is a way to diversify against the risk of buying at the wrong time. If you are a very experienced gold investor and are trying to time the market, that's another story but dollar cost averaging makes sense for the majority of gold investors.
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