Getting Started in Precious Metals Investing
Curious about investing in precious metals but you just don’t know where to start? As a market leader in the bullion industry, we have created this handy guide to give you the best advice and resources to get you started investing in precious metals, specifically bullion, the right way.
Is investing in bullion right for you?
First you need to determine if investing in bullion is appropriate for your situation. Are you buying to balance your portfolio or for asset protection? The type of investment and amount to invest will drastically impact your choices. The thoroughness of your due diligence will pay huge dividends.
There are many reasons to buy bullion. You can purchase bullion for its beauty, for its utility, as a unique gift, but its primary usefulness is as an investment vehicle. Nearly everyone can benefit from at least a small amount of bullion in their investment portfolio. One of our non-commissioned bullion sales associates can guide you to help you make the best choice concerning your bullion portfolio.
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How much should you invest in bullion?
Once you have determined that investing in bullion is the right move, what portion of your investment capital should you commit to bullion products? While each person’s situation is different, most advisors suggest 5-20% of your portfolio should be committed to precious metals.
When you find a reputable dealer you can trust, you should begin purchasing bullion as your budget allows. Set a goal for the percentage of your investments bullion will represent, somewhere between 5-20% depending on your tolerance for risk. Make sure you are purchasing bullion and not rare or numismatic coins, as unscrupulous dealers take advantage of the naive buyers to try and sell them “rare” coins at exorbitant premiums promising amazing returns. Instead, find a trustworthy dealer and start buying as much bullion as you can afford.
How often should you buy bullion?
After you decide on the amount to purchase, you must consider your purchase timing. Should you purchase the whole amount at once? Or break up the purchases over time? Or should you try to be a market trader and time your purchases to market fluctuations?
Frequent and smaller purchases will help spread your risk over time more than infrequent larger bullion purchases, and we don’t recommend timing purchases with market dips. Trying to guess what the market will do is difficult even for professional investors, much less the casual bullion buyer. Attempting to time markets by buying low and selling high is not advisable. You would do well to understand that metals are long term investment. Set a schedule to purchase bullion in smaller quantities in addition to buy orders when your preferred metal dips below a certain threshold. You can determine your price threshold by studying our free analysis charts here.
Who should you trust to buy bullion from?
With so many bullion dealers to choose from, how do you decide? How can you spot an honest dealer and avoid getting swindled?
Look for a well-established dealer with history and stability in the business. Make sure the business has a real brick and mortar location and not just a website with a telephone number. The merchant should be able to tell you the price of your items in real time, the estimated ship date, and communicate with you at every stage of the purchase. You should also be wary of any dealer that charges you extra fees or commissions, as that is a red flag for dishonest behavior.