1oz. Gold Eagles? How should I invest 5K in the next few days?

SilverHaze · January 28, 2006 1:36AM

I've been bitten by the 1oz. Gold Eagle bug! I've purchased two in the past week and ... well... I'm hooked! I have 5K to invest BUT BEFORE I DO... I'm here to respectfully request some [serious] input from you fellow forum members that are much more knowledgeable than myself.

Taking into consideration the fact that this 5K is just about all I have available right now, I have an opportunity to purchase (8) 2006 1oz. PCGS MS69 "First Strike" Gold Eagles for $609 (each) delivered, but I must act quickly.

Is this a wise investment, or should I do something else with my cash?

What would YOU do, and why?

Judging from everything I've read and learned here, I have all the confidence that THIS forum is probably the best place to find some good advice!

Dave

I have to go to work now, but I'll be back this evening, thanks in advance for any help/advice/better offers you can provide!

kcnovice · January 28, 2006 1:44AM

flaminio · January 28, 2006 1:46AM

It's not a bad price -- only about $50 over melt, and if you factor in costs for the dealer and the plastic, that's probably worth the $50. On eBay they're selling for about that price; some a little higher, some a little lower.

Freak1c · January 28, 2006 2:01AM

As stated above, this is a tough call. However for me you are buying bullion. I do not buy graded gold bullion; you are just paying a premium for it, why ? Also, this is a tricky time to buy gold bullion. The price is kinda stuck in this range, and analysts are predicting $600 by year’s end, so if you plan a quick turn around it may or may not happen. If you plan to hang on over a few years, you may see $800 and you may not. If you want to buy graded ounce coins, stick with pre '33 Gaudens which are up in price also, but, they [IMO] have a better chance of price increase with less risk. Do your homework. Again this is my opinion. Be careful to buy the coin not the holder. Good luck !

Freak

CarlWohlforth · January 28, 2006 2:07AM

If I were buying certified gold and was trying to get near bullion prices I would look for low grade US gold coin like Liberty or St. Gaudens double eagles.

When I did buy gold at bullion prices I choose a different route. I bought uncertified world gold coins. Many are available at or near the value of the gold if the coin was melted. There is more variety and more things I can learn about.

partagas · January 28, 2006 2:28AM

If it where me, I would take the 5k and invest in a high yeilding (dividend paying stock) security. Then take the dividends and then re-invest as you see fit. I.e. other stocks Gold ETF (GLD) or in oil and gas etc. Commodities all generally move up together. Based on the continued demand from overseas and here in the States. This continued demand will cause all metals and basic materials to continually rise. Zinc, copper, coffee, cotton, etc.

Stick with a large market cap bank, for the most security. Example Wells Fargo (WFC).

Although Gold is a popular investment today. It won't always be. So diversify your portfolio. And most importantly protect your principal investment. Place market stops on your positions like 10% or 15% below current levels. This way in the event of continous declines you are protecting the majority of your principal.

RedTiger · January 28, 2006 2:32AM

<< <i>I've been bitten by the 1oz. Gold Eagle bug! ...

Taking into consideration the fact that this 5K is just about all I have available right now, I have an opportunity to purchase (8) 2006 1oz. PCGS MS69 "First Strike" Gold Eagles for $609 (each) delivered, but I must act quickly.

Is this a wise investment, or should I do something else with my cash?

What would YOU do, and why?
...
>>

If the $5,000 is all I have, there is no freaking way I would sink it into eight coins, eagles, Smeagals whatever. If that $5k represents a small percentage of my net worth (less than 5%) I would consider it. However, a much easier strategy emotionally is to buy a few now, a few in a couple of months, the balance at the end of the year or early next year. The average collector has no business trying to time the bullion markets. The average collector usually does incredibly poorly if they attempt to.

Virtually everyone thinks he/she will the exception with the Midas touch, but only a small percentage end up having that good fortune. Let me repeat, tops are defined by the highest number of buyers, fewest number of sellers. So the average person is much more likely to buy at a top and sell at a bottom.

Gold is extended and may go higher. In my opinion it is header much higher in the long term. However, even if I am correct, it will be a bumpy ride. The corrections may be sharp and steep and will scare a lot of people out. The easiest people to scare out are those with all their eggs in the one basket who bought at an intermediate high. That might match the description of someone buying today.

Given all that, if someone has money burning a hole in their pocket, common sense and calm words usually are ignored and emotion (and stupid decisions) usually seize the day.

I'll repeat my cliches. Diversify. Average in, average out, buy in small increments, sell in small increments. The typical person has no business trying to time the bullion markets. Most that attempt to, will fail.

fc · January 28, 2006 2:34AM

i think you should not be shy buying gold and getting possesion
of it.

it is about time gold came up in relation to how much goods cost.
have you seen what a nice suit, pants, and jacket cost? yes,
500-600 dollars for a well made suit.

Well gold should cover that ;-) and now it does. So it finally caught
up with goods, and has much more room to grow as our govt spends
us into oblivion.

fc

mrearlygold · January 28, 2006 2:39AM

If 5 g's is all you have but you are bitten by the bug, buy one or two nice gold coins.

You may never see this kind of market again.

JDelage · January 28, 2006 3:05AM

I'd recommend Vanguard's Total Stock Market index fund, for investment purposes. For hedge purposes, basic uncirculated bullion - including smaller denominations. For collecting purposes, I can't make a recommendation but I'm pretty sure graded bullion is about as bad a choice as any you could make.

Stork · January 28, 2006 3:50AM

Like many above have said, if $5000 is all you've got, then I would not sink it all into gold. If $5000 is your gold budget, then think about what you are after. If it is purely a bullion play, then the goal is to get the price as close to spot as you can, and there are many reputable dealers out there--for 8ish ounces ebay is not the best place to go. If you want graded US gold, then there is some good advice about some nice pre-1933 gold coins above and in some other recent threads (run a search on 'gold'). There are also non-US bullion coins that are very neat to see, and non-US formerly circulated gold out there too.

If it's gold Eagles you must have then go for it, but look around first to make sure that's what you want, and what your investing goals vs. collecting goals really are.

Here is a link from an on-line dealer I have not done business with... Linkage but I think the advice is very sound. Note #17 regarding certified bullion.. If you want some dealer links, search this site as there's been a few threads about some, or PM me. I don't sell and I have no interest in any of these guys other than I can tell you who I have dealt with and how I've liked them.

Cathy

edited to add the link, duh!

BigE · January 28, 2006 4:08AM

silverhaze said all he has is 5K RIGHT NOW, maybe he will have 5K each month, who knows! I think the bullion idea is fine if he wants to satify his gold "itch".---------------BigE

TheRaven · January 28, 2006 4:18AM

I was looking at buy some gold, not necessarily that much but as a pure investment I think 1 oz bars is a better bet, you don't pay nearly the overhead you do with eagles or other coins.....

If you are interested in a bit of investment with a mix of collector go back in time to before 1933 and have fun there.....

TwoSides2aCoin · January 28, 2006 4:24AM

$20 St Gaudens, $5 Gold Indians, $ 3 Princess ... but bullion ?

forget the bullion... you are better off putting that five grand into one RARE Gold coin.... chances are a lot better you will not see fluctuation but a steady rise with this type gold as an investment over bullion, as bullion is tied to the market.

<---humble opinion

AU58WALKERS · January 28, 2006 4:39AM

i had this same "BUG" back in the '80s when gold/silver was due to set record highs. Same amount of capital as i recall.
learned a very nice lession. "never, ever, follow the sheep to the slaughter house". it seems to me that more
people will invest their hard earned $$ when the market is about to peak than when it is about to bottom. (at least i did).
i suspect that you are of the younger generation (no disrespect, but anyone younger than me is the Y.G. and i am older than water)
so IMHO you will see many ups and downs in the metals market.
C. D. s till you learn the market.
OH AND OF COURSE I LOST MY ASS! i made up for it many times over buying gold coins with the lowest premium when the market was low
(on the downward cycle instead of upward)
GOOD LUCK and thanks for letting a old man rant.

trozau · January 28, 2006 5:13AM

My perspective on coin collecting and bullion:
a) Coin collecting is a hobby and should not be looked at as an investment. More times than most you'd be lucky to get back the money you put in to buy the coin. So just enjoy the hobby and collect what you like.
b) Bullion (gold and platinum are my preference) are again not investment instruments but hedges for inflation. You'll find other instruments of investments with higher average of returns.

In my case, I have the best of both worlds. I have turned a hobby I enjoy greatly to work for me as a hedge as well.

fishcooker · January 28, 2006 6:31AM

I'd pay off credit cards.

alfalfa · January 28, 2006 7:05AM

Buy some I Bonds. Or shares of MUHLX.

RJ

Steve27 · January 28, 2006 8:09AM

If you felt that you had to buy gold then the price quoted to you is too high, from the Tulving site:

2006 ($50)-1oz Gold Eagles PCGS MS69 First Strike , spot + $20.00 todays price = $579.20

I WOULDN'T buy gold at this point; downside potential is greater than upside. I would buy I-bonds LINK 6.73% yield right now.

michael · January 28, 2006 2:31PM

1oz. Gold Eagles? How should I invest 5K in the next few days?

pass

ScarsdaleCoin · January 28, 2006 10:56PM

I could sell you almost 9oz of raw gold.....so your giving up 1 oz of gold for 8 pieces of plastic....hmmmm

MrKelso · January 29, 2006 12:21AM

$2500 Silver Eagles
$1000 Gold Coin
$1500 Cash in case a nice coin comes along later

OnlyBuffalos · January 29, 2006 12:49AM

If you have ruled out all alternatives and have decided to "invest" in gold, my suggestion would be that you seriously evaluate what vehicle would provide the best return on your investment based on the amount of risk you are willing to take. Due diligence should always be done before making any investment. Try to avoid emotional decisions.

My personal opinion/choice is Gold Fields Ltd. (NYSE: GFI). It has a great deal of leverage in a rising gold market but will sink fast in a declining gold market. There are many less risky gold investment choices but they will have less leverage in a rising gold market. Can you afford to lose some/much of your investment?

Good luck.

BigBen · January 29, 2006 2:02AM

Hi Silverhaze,

I would take your 5k and buy SILVER american eagles instead! Why? Because silver has the real potential to go 3 to 8 times what it is now. Gold is more limited, becuase if gold hits an incredible $1,000, you still wouldn't have doubled your money. Do the research and I think you'll agree!

BigBen

RYK · January 29, 2006 2:47AM

Buy some I Bonds. Or shares of MUHLX.

I like/own MUHLX. And he's a fellow Pittsburgher. GO STEELERS!

Dabigkahuna · January 29, 2006 4:12AM

For a bullion play, I think silver has more up side potential in the short term.

The big old $50 Gold Eagles are really neat though. I don't think I would but all the same date unless perhaps I was buying a roll. You would be a third of the way home to have having a whole date run of PCGS MS69 $50's with $5m to spend. The First strike coins will probably trade at a small premium to the regular labels, at least until we see just how popular they become.

Larry
Dabigkahuna

SilverHaze · January 29, 2006 2:56PM

I want to sincerely thank each and every one of you for your insight, advice, comments, and suggestions! I'm glad I posted the question, had I not, I'm almost positive my 5K would be
"invested" by now. I've decided to hold off on the gold for awhile, do some research, and come up with some NEW ideas that WON"T make the little woman so mad

Seriously... thanks! I especially enjoyed the link that Cathy (stork) provided, very informative, thanks! The comment from "Fishcooker" about paying off credit cards kinda slowed me down also! I liked "TwoSides2aCoin's" idea about one rare gold coin... I spent most of today checking out certified Double Eagles, Morgans, and Walking Liberty Halves (but I managed to restrain myself). You ALL contributed greatly and I appreciate your input AND your time!

If you folks don't mind, I'm gonna hang around here for a while and see how much more I can learn. I'm fairly new to coin collecting, and I've known for a while that this is the place to come when I need some good coin collecting/investing advice (and an occasional good laugh)! I don't get to come here very often, but I enjoy visiting this forum when I can because there's so much KNOWLEDGE... mixed (of course) with some humor, ridicule, sarcasm, jealousy, hate, love... well, not really hate, but sarcasm for sure ... just a big potpourri of friends, and fellow collectors, and that makes it interesting and fun!
Thanks again!
Dave

GO STEELERS!

aficionado · January 30, 2006 3:54AM

Judging by you last post, I think you've calmed down. In your original email you state "but I must act quickly". By reading the response, you don't have to act quickly.

Myself, I'm waiting to see if the .999 1 oz Gold Buffalo will be coming soon. I think that will be one sweet coin. Plus, if they only make it for one year, it should be a collectable.

That would be my choice, why buy the eagle, with 91.67% gold if you can get a possible 1 year issue buffalo/indian .999 coin.

coynclecter · January 30, 2006 4:12AM

Good decision to take a moment. Whenver you feel pressure in investing it's usually the wrong decision.

First off , make no investments while you have any hi percentage debt. You will not make any safe return that can compare to a 14% or higher credit card.

2nd, determine you time frame. If you might need the money soon, don't buy something you will need to sell. There is always a cost in transacting.

3rd If you want bullion, buy bullion, if you want collectables, then buy those. Don't try to buy both in the same item. Do you really think that 2006 Eagles will ever be rare in your lifetime?

Gold and silver bullion coins are much lower than hi grade US collectable coins .Most US Generic gold coins have been ungraded twice and are not close to rare in 64 and 65 grades. When the equity lines dry up these prices will fall and you won't see any buying support from foreign investors or central banks like you will with bullion. You're too late to get in on that game.

trozau · January 30, 2006 8:45AM

<< <i>Myself, I'm waiting to see if the .999 1 oz Gold Buffalo will be coming soon. I think that will be one sweet coin. Plus, if they only make it for one year, it should be a collectable. That would be my choice, why buy the eagle, with 91.67% gold if you can get a possible 1 year issue buffalo/indian .999 coin.

>>

The new Indian Head-Buffalo .9999 fine gold coins will not be limited edition, at least not the first year. The bill permits the Mint to "change the maximum number of coins issued" in subsequent years. Further, the bill authorizes the Mint to change the designs on either the obverse or the reverse after the first year's production.

au58 · January 30, 2006 9:28AM

Unless you are buying gold as a measured portion of a diversified portfolio, it is not an investment. Rather, it is speculation. When speculating, you have to be positioned to absorb substantial losses at the prospect or realizing substantial gains. Can you afford to lose it all?

topstuf · January 30, 2006 9:30AM

Wait til next week. Gold ...always... tanks for Long Beach.

1oz. Gold Eagles? How should I invest 5K in the next few days?

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