Might start getting some gold.

I have been investing in silver for a while now and my gold stash currently consists of my 18K gold class ring and a 14K gold cross and chain I inherited at my Uncles funeral (Don't really view these as investment gold though). I want to start buying some gold. But before going about it I want to ask some questions.

1) This is probably the most important question. First some background. I've graduated college and have my degree and am in the process of finally getting my career. So far it looks like I will be recruited by D.C. Metropolitan Police or Calvert County Sheriffs. But at the same time I'm putting aside about $300 of each of my paychecks from my current job to save up for the police academy in case I don't get hired. Which leaves me about $180 for myself that needs to last two weeks. So the question is should I wait on worrying about buying gold, or is it never too late to start?

2) I've noticed Kmart has been advertising that all gold jewelry is %70 off. They've been advertising this since December. Do they really have good deals on gold or is it all overpriced even with the discount? (According to the adds the jewelry is not gold plated or gold filled.)

3) On apmex there are some gold coins in their clearance section. https://www.apmex.com/Product/11161/2006_Year_of_the_Dog___1_20_oz_Gold_Coin.aspx, and https://www.apmex.com/Product/28694/1_20_oz_Gold_Australian_Kangaroos___Nuggets_.aspx. They had a year of the snake 1/10 oz coin but its gone, showing that their stock can run out. Also this isn't in the clearance section but Ill ask about them anyways, https://www.apmex.com/Product/1048/Mexican_2_Peso_Gold_Coins.aspx, https://www.apmex.com/Product/1048/Mexican_2_Peso_Gold_Coins.aspx. Are these good prices for the coins?

4) Should I not treat the above coins as bullion and just buy them to add some gold to my coin collection?

Please Answer away.

 

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Never buy jewelry as an investment. Even at 70% off, you are paying many multiples for the gold content.

If you are buying gold for investment, the advice is simple: Buy gold at the closest to spot as you can.

 

Not really an answer to your question but rather more of an opinion of mine: if you're going to invest in gold try to do so by purchasing 1/2 oz. and 1 oz pieces. Stay away from the fractionals (1/10, 1/20 oz). If you ever have to sell the fractionals are going to take a beating.
1 oz. pieces are more expensive (takes longer to save up for them) but in the long run you're better off.

 

I figured the kmart deals weren't a good idea. Was not aware of the fractionals being a bad choice. Well then it seems that right now I shouldn't worry about buying gold until my income becomes higher.

 

Fractionals aren't necessarily a bad way to go, but green is right, you pay a premium way over spot for fractionals.

The other side of this coin is that you can also demand the same premium over spot. It's somewhat of a zero-sum game depending on your luck and the price of gold.

 

I think that's a good idea. But keep in mind that you can spend the time studying coins in general and gold coins in particular so that when the time comes, you can buy intelligently and with confidence.

 

Gold is getting a lot of hype. When a waiter is telling me that I should buy gold, it's getting a little rediculous.

First, I would suggest meeting with a financial planner. There are many factors to a personal portfolio and precious metals are only one small portion of that. You dont mention any savings. First priority is to establish an emergency fund in cash savings. How is your credit card debt? Do you have a lot of debt at high interest rate? Perhaps that $180 would be better directed towards getting back into a positive cash position. Once you get a grip on your overall financial health ..you can think about buying gold.

 

I believe this is completely wrong and misleading. Very few people own investment gold in a quantity that is even 5% of their assets. Very few institutions own any physical gold. Recently, one major insurance company [I forget the name and don't feel like looking it up] announced they would buy a significant amount of gold. This is about the only exception I have seen so far. There are trillions of investment dollars floating around, and when it becomes standard policy for institutional investors to hold a 5-10% allocation of gold, the price will be multiples of the current price. There won't be enough gold to fill the demand at anything close to current prices. The waiter story is irrelevant.

 

To Andrew: Im only 22 and thanks to college I don't really have any savings. Thankfully I have no credit card or other debts to worry about.

I frequent a PM forum regularly and on both that site and this one gold seems to be pretty hyped. Maybe I'm just getting caught up in all the excitement. I'll just keep saving a little from every paycheck and just maybe if I have enough money by the end of the year I'll get a 1/2 oz eagle or something.

 

Due to all the hype from TV infomercials about owning/buying gold and those companies on TV that buy up all of your unwanted jewelry for cash has everyone (common folks who have never owned any gold before) wanting to buy in to the gold hysteria. It is a little rediculous.

I'm talking about every day citizens like this new DC police officer and a conversation with a waiter I had last week at the Old Ebbitt Grill. Reading all the hype, they want a piece of the action but they don't have the cash resources to really make a change in their portfolio today.

Thanks sweeps but comments about insitutions and insurance companys is misleading and totally irrelevant but thanks anyway.

 

I think that makes sound sense. Over time, you will acquire enough PM to become I viable part of your portfolio but that's the benefit of dollar cost averaging and the effect of time. You should look up Rick Edelman, he is a is/was a Georgetown professor and finnacial advisor who's best known for his book The Truth About Money. It's great information as you start out on not only your working career but your financial career as well.

http://www.ricedelman.com/


I started out buying 1 American Gold Eagle every year and as my income increased, I was able to get 2-3 per year and so on. In 20 years you will look back and discover that you have generated a nice solid foundation.

 

Ill look into that book. I think Ill just start saving up for one of the first spouse coins.

 

If you watch eBay enough, you can sometimes find the first two coins (the Washington and the Adams) for near melt since the original issue prices were around $410-$430 each and the folks selling them now are still likely making money. Also, they sold out quickly when speculators thought they could flip them all for profit, now there's a bunch of these on the market. The later spouse coins sold for much higher prices (over $600 each) and have much lower mintages so finding them anywhere near spot prices will be tough to impossible.

Another way to get "cheap" U.S. gold coins is to buy Gold commemoratives from the 1980s and 1990s. Some of them have relatively high mintages and are don't have much of a numismatic premium. They can sometimes be found below melt prices on eBay if you look hard, especially when they are sold as part of a silver/gold set.

Good luck :kewl:

 

If you're too strapped for cash to buy gold, than silver's an equally viable option. In fact, I recommend silver more than gold because, not counting inflation, gold is already past it's 80's high whereas silver is only at 27% of it's 80's high not counting inflation and in my opinion, silver is more exiting since $100 worth of silver at $10 an ounce is 10 ounces whereas $100 worth of gold at $1000 per ounce is only a tenth of an ounce, therefore, a 50 cent per ounce increase in silver is really a $5 increase on a $100 investment whereas the real rate of return on a $100 investment in gold if gold goes up $10 per ounce (assuming $1000 per ounce gold) is only a dollar. So while these are hypothetical numbers, they do well to serve the illustration.

There are only four types of silver I recommend, the top one is bullion coins such as the Silver Eagle because when it comes time to sell them, it'll be the easiest form of bullion to sell. My second recommendation is silver rounds because they look like coins, but are always cheaper unless they start accumulating numismatic value due to age or rarity, by than it switches into the category of numismatic silver, which is my least recommended category because that's where the highest premiums are. However, numsimatic silver is still recommended because they're the easiest to sell as long as the coins are either rare or in very good condition.

In third place comes silver bars, these are harder to sell than silver rounds, but they usually have the lowest premium. They are just barely easy enough to sell to even get my recommendation. Out of the four recommended forms of silver, silver bars are the hardest to sell, so make sure you get a well know bar if you go this route. Well known bars include Englehard, Johnson Mathey, and so on.


If you decide to purchase numismatic silver, the form of numismatic silver I recommend is pre-64 Junk silver, since this is the form of numismatic silver you'll pay the least for. My favorite way of acquiring this silver is by roll searching since you can easily get a silver dime for 10 cents this way, but I only recommend roll searching if you can make time for it, otherwise, it'd be better to get your silver from APMEX in the form of Silver eagles or the silver round that sells closest to spot. If you go this route, I recommend saving at least $500 before making a purchase, all the while, keeping track of the price of silver so you can better predict when the price of silver will dip during the month you decide to purchase (any source for silver quotes is fine as long as they consistantly quote silver from the same exchange, i.e. comex, new york precious metals exchange, ect). The reason you'll want to know when to buy as silver goes down is because you can get more silver for less money. If silver starts the day at $15/ounce and you're considering buying $510 worth of silver (assuming your buying at spot price) and if by the end of the day, silver drops 25 cents, you'll be able to buy one extra ounce of silver just by waiting until evening to buy, but you'll only be able to identify the coming of secondary bare markets (otherwise known as corrections) within the primary bull if you keep track of the silver price in your own excel spreadsheet

 

I like getting around 5-10 ounces in silver once a month with getting very low paychecks, yet I survive and still pay off my car.

I like the silver bars because they are easier to pack together, while coins are more expensive usually and dont fit nicely in a safe.

When I'm paying 19$ for a 1 oz canadian maple while I can buy 1oz silver bars from pan american silver corp for 15, I take the bars

 

I gotcha on that Ins. Co. reference, it was Northwestern Mutual. I recall that made a (brief) headline in all this gold hype recently...

Northwestern Mutual Makes First Gold Buy in 152 Years
http://www.bloomberg.com/apps/news?pid=email_en&sid=ajf0L9wTPq6Y

 

If you are in your 20's then I think buying bullion is a big mistake, it will only go up or down with the price of bullion.

If you want to make a lot more money you need to look into rare coins which will do much better than bullion. I have known people who purchased bullion decades ago than barely broke even, or ones that purchased bullion in the 1920's have theirs only follow the price of bullion whereas had they purchased it in rare gold coins the amount it would have appreciated would have been 30 times what it did.

 

What does it matter if he's 20 or 45, if you're saying you know people who haven't made much in bullion from the 1920s? If this was true, then most people wouldn't even be commenting in this bullion section, because they wouldn't be investing.

I need to disagree and say that bullion is a good investment, but I agree that rare coins are too. The difference, however, is assuming that there will always be a demand for rare coins, because people need extra money to buy these items. Meanwhile bullion retains value and will always be needed. So I vote for bullion

 

Bullion is generally considered a hedge against inflation, and price tracking shows it has not outpaced the appreciation of rare gold coins.

The ones that bought bullion in the 20's made money to today, that is true, but not nearly as much had they purchased the rare gold coins by comparison.

So I just don't see someone with the potential of 4 decades of appreciation getting stuck holding bullion when he could own something that would be amazing in 40 to 50 years, or even more.

 

Well I am in the pay you college debits , get established , be patient and learn all you can and put a little cash back for your rainy day fund group. When I was in college I acquired some debt and it was nice to see that amount shrink and also have a little cash to go out when I wanted to. I hated living on a budget. You have plenty of time to invest.

Just my opinion