Gold as an investment...help please.
craig63
Posts: 16
OK. I have searched the internet for a month, doing as much reading as possible. I want to purchase gold as an investment. I have some real estate, cash, stocks, etc, but want to diversify. I am 42 years old and figure sometime in the next 10 years, gold will be over $700/oz. I figured buying gold coins was better than buillon, because the increase in value with gold, and as a collectable. I just bought 2 St Gaudens and really like the way they look. I am keeping to MS 63/64. I planned on buying a few (3-5) per month for the next year or so and holding them for a long time (5-15 years). My question. Is there a better way to purchase gold and am I doing the right thing? ( I know this is very speculative). I would just hate to pay $650 for a coin and have it worth $650, 10 years from now (or worse).
Thanks in advance.
Craig
Thanks in advance.
Craig
0
Comments
If you believe that gold is going to $700, I think that you are playing it exactly as I would (MS 63/64 Saints) (if that were my underlying assumption). You could also diversify a bit with $20 Libs and American gold eagles, if it suited you.
In other words, if you pay $650 for $400 worth of gold today, and gold rises to $700, what if your coin is then only worth $750? It may be unlikely, but it seems like additional risk. You're betting on two things coming true - the price of gold rising, and a corresponding increase in the premium for collectible coins. You could buy bullion and only have to worry about one of those.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
Just a thought. Good luck.
Edited to add: You might also stick to PCGS and NGC graded coins to help protect yourself and your coins value.
If you like the numismatic approach why not a nice AU58 - MS63 coin instead? If I were buying gold I would buy bullion, a hot coin market can inflate your dollar cost averaging.
JMHO
Rich
I thought the same thing about buying straight gold instead of coins. I just figured that if gold hit $600/oz, than that $650 Saint would be closer to $900....but who knows. Maybe I will get some gold bars as well. I just thought that in 15 years, those St. Gaudens will be around 100 years old and they may be pretty pricey.
As far as going for a set, I am trying to head down that path.
Craig
If anyone has a good website to get these, please let me know.
Thanks again.
<< <i>Wow, fast responses...much appreciated.
I thought the same thing about buying straight gold instead of coins. I just figured that if gold hit $600/oz, than that $650 Saint would be closer to $900....but who knows. Maybe I will get some gold bars as well. I just thought that in 15 years, those St. Gaudens will be around 100 years old and they may be pretty pricey.
As far as going for a set, I am trying to head down that path.
Craig >>
A "set" of St G's will cost you over a million bucks. Perhaps you mean a mini-set?
Good idea to diversify within the gold spectrum.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Here is a potential diversified approach to cover all possibilities:
1/3 MS 63/4 Saints
1/3 American Gold Eagles (stick to 1 oz only)
1/3 Common date raw choice AU $20 Libs, which can usually be obtained for a small premium over melt.
If you catch the coin collecting bug, add rare date gold coins to the mix.
Personally, I keep a some MS Saints and AU/MS $20 Libs and AGEs around "just in case" gold makes a strong upward move. Just a small hedge position for me, not a big bet on the direction of gold prices.
I would avoid gold bars. The AGE's are easier to sell. And buying in one ounce units makes it easy to sell just a little if you want.
A place that has gotten good reports for bullion coins is tulving.com
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
San Diego, CA
If you want gold coinage bullion, the saints are certainly a well followed and heavily collected issue that was make for what you are talking about. If I was buying coins for bullion only, I would go with the modern Canadian issues since they have very little coin premium attached to them...These are todays quotes from Kitco, one of the more prominent bullion services.
Quantity
Gold Eagle 1 oz $459.24
Gold Maple 1 oz $457.07
Gold Krugerrand 1 oz* $452.71
Gold Bar 10 oz $4473.00
Gold Bar 1 oz $447.30
Gold Bar 1000 gr $14172.04
If you have a taste for history and want to take the next step up to coins but don't want to sacrifice much premium for historic US gold coins then you would be well served by purchasing $10 Liberty gold...
2066 Liberty Eagles
1893 $10 AU50 ANACS. Nice design definition, with honey-gold surfaces. A moderate scrape is noted on Liberty's neck and che... Bullet ANACS AU50 June 6, 2005 $218.50
2091 Liberty Eagles
1901 $10 MS60 ANACS. Honey-gold patina imbued with traces of light tan adheres to lustrous surfaces. The grade is defined b... Bullet ANACS MS60 June 6, 2005 $253.00
2101 Liberty Eagles
1907 $10 AU55 ANACS. Nicely defined, with bright peach-gold surfaces that display several small obverse contact marks. F... Bullet ANACS AU55 June 6, 2005 $253.00
$10 Libs have about 1/2 oz of pure gold and as you can see, they typically trade for slightly above melt.
The very first thing you should do is become familiar with these investments and educate yourself. I do believe gold will gently appreciate over time. Any appreciation that may be had in gold bullion and gold coins can easily be erased by poor judgement at purchase. Smarten yourself up some and when you have questions come back here and you will receive very accurate replies.
Agree that $20 Liberty would be a smart thing to nab as well.
The more varied the better.
I am working on a gold type set of 20th century coins figuring this is collector and investment friendly.
IF YOU HAVE NOT FIGURED THIS OUT STAY AWAY FROM TV COIN SHOWS, AT LEAST PURCHASING WISE, WATCH THEM TO SEE WHAT THE COINS LOOK LIKE, BUT DON'T BUY.....
That's how it worked with silver when it went to meteoric levels in '79-'80.
If you are looking at 10 years ahead, then I'd take a good look at silver bullion in 100 ounce bars. I think that's a much better play percentage wise. Assuming it's profit you want and not the numismatic aspect.
I don't think you are going to have to wait 10 years to see a dramatic rise though.
Edit - you can do better than Kitco as far as the price structure when buying. Find a good local dealer and become a steady customer. I can buy gold eagles for $6 to $8 over spot as a general rule.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Stick with PCGS or NGC graded coins. This will minimize your chances of being burned, and will make the coins easier to liquidate in the future.
Check out Heritage's auction history (www.heritagecoins.com) or E-Bay's auction history to get an idea of what these coins really sell for. It's quite a bit different than the published retail price guides.
However I like coins and variety. So I decided on buying some 100 year old European gold coins which are available for very close to their melt value. They were used as money. They have interesting designs. They are old. I am able to buy a variety of coins from different countries. So the whole thing is much more interesting but at the same cost as buying bullion.
Decide what sort(s) of gold investment you want to make and why (anticipation of increase in growth, hedge against the falling dollar, fear of economic collapse, hedge against inflation etc). Could be any of the following for example: bullion coins vs. RELATIVELY non-numismatic coins that may have circulated (such as sovereigns and roosters etc), coins of numismatic interest (such as Saints, Indians, Libs perhaps for those concerned with the prior history of confiscation) vs gold bars (sometimes limited because buyers may want them assayed) vs electronic gold vs holdings in a vault somewhere (allocated vs unallocated) vs shares in gold mining companies etc.
Read up on gold and look at various websites. I am a small potatos person and have no vested interest in any of these places but...for example look at CNI as someone suggested above. Look at usagold.com I've not shopped there, but this site also has gold investing information. Hard to resist a book called the ABCs of Gold Investing (for sale there or on Amazon...contents). Go to kitco.com and poke around. The commentaries are sometimes amusing and/or interesting. Read, google, search, and use your head. Look at what someone is trying to sell before you acting on their advice.
There is a rather lengthy thread going about gold pcgs thread which has lately been degenerating into a bit of political commentary, but has some rather interesting posts. Better have a snack ready though, it's a little long.
Just MHO.
Cathy
Does anyone think that silver has a better chance of appreciating more than gold?
GOLD BULLION is insurance against economic failures, travel restrictions, and governmental policies.
Gold COINS (numismatic) are relatively gold related, but are not ANYWHERE near as liquid. The profit potential on this speculation is sometimes higher but sale TIMING can bite you. A gold bullion coin can be sold every day everywhere.
With such a long time horizon, it looks like spreading between the two would be good for your purposes.
MUCH heavier toward the "bullion" side if you are relatively new to COIN speculation.
I think you'll be happy with either.
I agree with the silver speculators that some events could make it far better than gold. But silver will cut your guts out from time to time just because it enjoys it.
Howdy. When you formulate and execute your plan--remember to get advice from people who have no interest in selling you something. In other words---PLEASE-- do not buy gold off the "investment counselors" who travel on the internet and TV.
If you want to do a gold play --Saints are probably the best. 65's are pretty reasonable right now at 1000-1150, considering last NOV they were 1500. Buying saints in 63-64 is a questionable move IMO.
Buying certain dates of $5 &$10's is my opinion of where you will make your % return. I should add that most consider my opinion overpriced at it's present cost.
Remember--there is counterfeit gold out there in the form of raw coins. Learn how to detect it if you like to buy raw.
Best of luck.
<< <i>How do you buy silver in 100 ounce bars?
Does anyone think that silver has a better chance of appreciating more than gold? >>
Just search on eBay for starters. Most coin shops deal in bullion and 100 ounce silver bars are fairly common.
Yes, I most certainly do think silver has a better chance of appreciating more than gold. It has in the last 2 years by a wide margin.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
To the above good advice, I'd add that if you feel that gold will be at $700 an oz, there are better ways to invest your money in gold than bullion. Gold futures and stock in gold mining companies to name two. Obviously this is a highly speculative call, and should be treated as such.
Saints are beautiful coins, and you can do far worse than to buy ms 63/64 double eagles, whether saints or liberties, but they should be viewed as coin purchases, perhaps as a small hedge in an overall investment strategy, not as a primary investment. To diectly answer your question, yes, there is a better way to purchase gold- buy bullion. I would rather have the double eagles, personally however. JMHO.
Don
PS if you search the archives, gold bullion purchases and investment are a much discussed subject. Obviously you are trying to do your investment homework. Read bearish as well as bullish gold arguments prior to your decisions. Welcome to the forum!
TorinoCobra71
but
if it was my money and i got a bee in my bonnet a bug up my a$$ about buying gold
i would buy choice super eye appealling ms63 64 generic saints that have NO rub and only fantastic orange gold lustre or as close to this as possible
i would also buy "commom date" three dollar gold pieces in really choice au slider uncs with great lustre and claims to choice unc in other words au-62 with great eye appeal
common dates 1854 1874 1878 and to some extent 1888 1889
make sure you buy that new bowers winters book on threes first!!!!!!!!!!!!!!!!!!!!!
i would also consider better date three dollar gold in choice au 53 to 58
1858
1860-1864
any of the 1500 and under mintage 1880's dates
She told me "the dollar is going to be worthless and you'll need these silver coins to buy food". ( !!!)
So I asked her Shirley, do you own guns? She said, why no why do you ask?
I said because what your describing is an out an out depression and possibly anarchy and the guy who has the guns is going to take your little silver coins.
So WHY are YOU buying this stuff is a question you have to ask yourself.
Buy the way, ever try to dump large quantities of silver real fast?
Try it sometime. Afterwards you might have a different opinion on this stuff.
And one more thing, I have quite a bit of my life in this business. I'd say less than 5% of it is in metals. I do this for a living. Most of the guys I do business with are about the same with regards to the metals.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
www.goldsheetlinks.com and click on Prospecting.
Jerry
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
And lastly, with our afinity for out-of-control fiat money, you can add real estate, homes, stocks, bonds, commodities, collectibles, and currencies as speculative as well. They are certainly not investments regardless of what CNN or Wall Street Crudlowe talking heads may say. With our supercharged fiat-FED system there is no longer any true investment vehicle, just different levels of pure speculation as the FED swings speculation from one area to the next. This is not investment and never has been. And gold is as good as any of them at this particular time.
The advantage of MS63 to MS65 common date saints at this time is they have leverage of 2 to 3X the gold price change as long as gold is moving in relatively steady patterns. Once we get to $700-800/oz or higher these premiums may start to melt away. At some pt, as Deadhorse said, the premiums will evaporate. I personally prefer gold in the hand compared to paper gold company promises. For now, Saints act like a gold share with leverage. At some point the MS64's should be traded back down into bullion or EF-MS61 Saints and Libs. $10 up in gold usually means $20-30 up in MS64/65 Saints.
Once the .99 fine eagles start coming I would shift to those. The current issues are not up to that standard. The rest of the world trades in .999.
MS63 to 65 Saints are far more liquid than better date saints. And you can easily pick up the phone and SELL 100 MS64 1924 Saints to a company like Heritage instantly. If you follow the basic trading rules of selling into strength, you can do very well like this. You can purchase MS64 Saints for 3% over wholesale with little problem.
You unfortunately cannot do this with a pile of better date saints.
And if you have a mini-collection of better dates it could take months to sell those properly. About the same premium you have to pay for bullion. If you want liquidity stay with bullion or common Saints and Libs. A 1911-D in MS65 will lose a lot of it's premium to a common date MS65 if gold goes to very high numbers. And if a common date MS65 saint goes up 30%, the 1911-d will NOT go up 30% as well.
The common date will almost always close the gap on the better dates. Let's face it, 95-99% of the people looking at common date saints are probably speculating with them anyways. They are not coming into the market to buy 1911-d because they are "better" values in the eye of the collectors. Safest and most liquid is what these buyers want. There is also the possibility that a shortage of old US $20 gold coins could cause them to earn additional premiums to gold bullion. It would take very little money to buy them all up.
And as I've said before, they cost equivalent or less money over intrinsic value vs. a stinkin' wheat cent. Think about it.
And when (or if) the gold market becomes a mania, you want to be out of gold and into something else. But the question is what because most other assets (incl currencies) will likely be hurting also.
It would best to be out relatively early and into something that will retain a large part of it's value. The game at the point will be trying to hold on to one's assets, rather than gaining. Most everyone will lose. Those who hold steady will win big time.
For now I like the MS64 and 65 saints. In previous moves they went up 50-58%% while gold only went up 25-30%. Leverage! But that same leverage works on the way down. Paper gold stocks and ETF's are only as good as the paper they are printed on. I like the physical metal right now with some diversification into the gold stocks. There will be many more ups and downs before it ends. Selling a portion of your holdings on each move, and buying back at the next weak pt is a good way to work this.
roadrunner