Buying gold is an essential part of a strong financial portfolio, but there are many ways for investors to put their funds into this precious metal. What is the best way to tap into the potential of an investment in gold?
Buying coins is the smart way to make that investment. This method provides two major benefits. First, they have an intrinsic value backed up by the value of their precious metal content. Second, rare pieces have the potential for appreciation over the years to really build value.
These two facts make buying gold coins a smart investment move. Over time, collectors and investors can steadily increase the value of a coin through trading and supply and demand. Rare pieces can fetch prices well over the value of their precious metals component. Rare pieces of a high grade will command a premium price from buyers who are looking to add to their collections or incorporate gold investments into their financial holdings. Investors who buy and hold these pieces can see long term gains on their initial investment.
Choosing the right investment coin is the foundation of building wealth through buying gold coins.
Finding Rare Pieces
The primary factor in the value of a coin is its rarity. The older and more rare the piece, typically, the higher the premium that is placed on the item when it is bought and sold. By investing in older denominations, investors and collectors alike increase their long term earnings potential. When determining the rarity of a potential purchase, use the Official Red Book to determine the number of a specific edition that currently exist and are in circulation.
One method to use in the search for rare finds is to look for old issue dates. Anything minted before 1934 has the potential to be a rare piece. In that year, President Franklin Delano Roosevelt banned US citizens from using gold coins as legal tender in an attempt to fight the effects of the Great Depression. The US government implemented a program to buy citizens’ gold and melt it down in order to stabilize the economy. As a result, any piece with a date before 1934 has the potential to be a rare piece and deserves further scrutiny.
Determining A Coin’s Grading
When it comes to buying gold coins, the next most important factor of a piece’s worth is its grade. Grading is used to determine the condition of a coin, and a better condition will fetch a higher price. Investors and collectors are more interested in well-preserved specimens. For investment purposes, it is best to buy the highest grade possible of a potential coin while still staying on budget. Buying gold coins of a higher grade at a lower quantity but higher quality is the best move to make.
Remember that a major component of the worth of any piece of currency is the value that collectors and investors place upon it. The premium value is heavily influenced by grade; investors and collectors alike want to purchase pieces that are both rare and in good condition for completing collections and making investments.
Of course, the highest grade and price isn’t always a guarantee of a good deal. Any potential piece of currency can be overvalued for any number of reasons. In order to avoid making a bad deal, refer to The Official Blackbook Price Guide to US Coins to get a good idea of appropriate market values in order to evaluate potential deals.
Only Utilize Reputable Dealers
Like any transaction or investment purchase, always be careful with whom you use to broker a deal. When buying coins for investment, only buy slabbed specimens, that is, pieces that are in approved, labeled, and graded plastic holders. Each piece has to be rated and certified by the Professional Coin Grading Service (PCGS), the Numismatic Guaranty Corporation (NGC), or the American Numismatic Association Grading Service (ANACS).
When making transactions through dealers, find a representative or company that has at least 30 years of industry experience. These dealers will tend to be the most reputable and knowledgeable. They should also be authorized through the Professional Coin Grading Service (PCGS) or the Numismatic Guaranty Corporation (NGC) as well.
Timing Of Buying Gold Coins
The best returns typically occur over long periods of time; values tend to appreciate over long time periods rather than daily or weekly. The current commodity price of gold and silver also has an effect on buying gold coins, so it pays to watch their market values when making a big purchase or sale. Overall, buying gold coins makes for an excellent investment choice.
Source by Stephanie Elman
Smart Tips For Buying Gold: How To Choose An Investment Coin That Will Perform Well
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