It’s no secret there are beaucoup self-certified investing experts willing to dole out advice like candy to any willing listeners. Because I work in the precious metals industry, I get to hear many of these brilliant ideas sold to customers from a myriad of sources.
Too often, the well-intentioned (we’ll give them the benefit of the doubt) advisors sell ideas to the unknowing and create a bit of a mess.
The issue of investing is very personal and quite sensitive; with the state of the economy and the likelihood of ever redeeming that precious social security you’ve been paying into for years, most prudent people are seeking alternate ways to prepare for their future retirement. This leads individuals to stocks and commodities- often precious metals. However, if you are new to precious metals, you might be looking for help to get started.
I wanted to find out some of the worst advice given to potential precious metals investors and address the faulty logic used.
Worst Advice #5: “Gold will likely undergo another government confiscation; buy our x/y/z coin/bar/round to invest in non-confiscatable gold! Sure, it’s more expensive, but this is your only true protection when gold is seized.”
Alright. I understand most of us own at least a little tinfoil hat and believe a(nother) gold confiscation is possible; however, to sell bullion at a high premium because it’s “non-confiscatable” is simply a shady dealing practice used by dishonest dealers. In the gold seizure of 1933, collectible and rare coins were exempt from confiscation, but there is no evidence to suggest a dealer can predict what the government would or could seize in an unlikely seizure. Don’t fall prey to this!
Worst Advice #4: “Gold is the only safe haven investment. If you are wise, your portfolio will be filled with precious metals.”
Yes, gold is a safe haven investment. Yes, you should invest in precious metals. However, a wise investor knows diversification is key. Most economists suggest between 5-15% of your portfolio be invested in bullion, with other stocks and commodities included to reduce risk.
Worst Advice #3: “Gold should always be stored in a bank safety deposit box.”
I can almost hear some of you chuckling. I think most of us have at least a little distrust of anything federal. And, I know the Silverbugs‘ motto is “if you don’t hold it, you 
don’t own it.” Storing your bullion in a bank can be convenient, but if you need to liquidate suddenly, you might not have that option due to business hours. You might be paying fees to store (and if you don’t want to pay a $5 premium, you don’t want to pay storage fees). Bank storage has its advantages, but a personal safe or hole in your backyard will do just fine.
Worst Advice #2: “Buy what you like.”
If you are buying bullion as a hobby, without a true focus on investing, then you can buy what you like. However, if your end goal is investing with profitable returns, you should be seeking low premium bullion from reputable dealers. You could choose the safety of sovereign bullion, backed by a government- this holds a slightly higher premium, but for many, the security of sovereignty is worth it. An alternative is low premium, privately minted bullion- not guaranteed by a government, but oftentimes does offer that aesthetic factor some enjoy and can be reliable if you shop trusted dealers, like Provident Metals.
Worst Advice #1: “Gold is for conspiracy theorists and doomsday preppers.”
That’s right, folks; I saved the best for last. This is my favorite piece of terrible advice because it undercuts the value and importance of bullion in your portfolio as a safe haven, portfolio diversification, hedge against inflation, and historically valuable metal. A certain financial guru commented that gold and silver are terrible investments made by doomsday preppers because, in the event of an apocalypse type event, only supplies like food and water will have any value, and those with bullion will starve. I thought that was a bit much. While I can see where he is coming from, there are ample uses for bullion in industry, and time has proven the precious metals will always be valuable to society. For thousands of years, man has found utility for gold and silver, and great value has always been given to the precious metals. While I don’t foresee the end times to arrive next week, I do believe investing in bullion for a financial or apocalyptic crisis is a sign of prudence, not paranoia.
I can’t wait to hear the worst bullion advice you’ve been given! Let me know below!
If you are a “conspiracy theorist” like myself, you might enjoy our phenomenal new series, the Nordic Creatures. Pick up the epic Níðhöggr 1 oz Silver Antique Round, today!
Happy sta
cking!
-J
I strongly believe in silver. Should some of those conspiracy theorists become right, having silver in pocket, in a safe that is controlled by the owner and easily accessible is crucial. Should a doomsday (week, month, year) come about, you do not want to walk in a grocery store with one ounce of gold trying to buy food for a week or so, Its best to have adequate silver to offset the small things required in case something happens.
I do set up as a dealer at some coin shows up and down the east coast. When I hear their stories of making a $17 to $50 profit on one ounce of gold, I just sit there and smirk. I personally buy my own silver at its lowest price possible, and sell it pretty close to spot. This year may be an exception to the universal rule, but I bought hundreds of ounces when it was as low as 13.84 and 15.75. Of the 1500+ ounces sold, the highest went for $20.00 an ounce, and the lowest was 18.00. I made close to 4.00 an ounce on every silver round sold. Now, the money sits in an account waiting for silver to go sub-17.00 once again so I can acquire about 1.5x the amount originally purchased.
For the monetary investment, I can buy one ounce of gold for 1250.00 or 70 ounces of silver. Fractional gold is more costly and the profit margin is less.
Having the holdings in hand is vital. Some of these vaults only offer “electronic numbers” in the amount of gold and silver you can have on hand, potentially. I do not see then having a space marked off where a persons share of gold or silver is placed. Without knowing the exact details of how that is handled, I won’t comment on it. Should something hit the fan, its going to be very difficult for these vaults to hastily ship thousands, if not millions of ounces out to the owners. I see that as a problem and eventually the truth of the matter is, the company may come up short on the timely deliveries and be unable to acquire enough precious metals to compensate the owners. They simply close their doors and go bankrupt and people could lose a lot of money.
I build a trust relationship with the people whom I sell silver to. I have had several people approach the table to tell their stories and how they got taken by some four letter auction house online and received something other than pure silver rounds. I tell these people that if the police buy from us, we are a trusted entity. I tell them to pick any round out of the case, lets go find an outlet outside some where and I will use a drill and poke a whole into the product I buy, thats directly from provident metals, or the other company Elemetal. I tell these people if your looking for an incredible deal, the only part of that incredible deal is that the crook on the other end is say that word and laughing that another sucker came along and bought inferior products.
The silver market has some steadfast investors. but there are alot of them that are looking for an excuse to make money in silver, and gold. The precious metals market is on edge with the potential increase in the interest rate that MIGHT come in December. They will buy in just before the announcement is made and silver may climb to near 20 bucks or more, and after all the hype is done, and they want to free up some revenue, they will dump it for whatever minor profit they will get.
People have to realize that it takes a HUGE effort by something, someone or an event for silver to go sky high. The Hunt brothers fiasco had silver go up to the mid 40 dollar range, and that was a significant event, followed by a significant disaster. For the most part, silver seems to trail gold by a ratio of approximately 70 to 1 on most days. I don’t see that changing any time in the near future.
Gold and silver are in hand commodities that can outlast companies who go bankrupt, merge with a hostile / rival takeover, a security breach, insider threat/ trader, fines imposed by the Feds and/or SEC, and the list goes on and on.
I like having an ounce of precious metals over a piece of literature that says a own a share of a business by proxy. Silver and gold have survived the test of time and is a trade/currency mechanism that is accepted world wide. It’s my favorite style of investment and will be for many decades to come.
Wow, thank you for the amazing info! Very interesting. 🙂
-J
I take offence with the idiots who say metals will have no value in a collapsed society. Look at post WW1 Germany. There was severe food shortages, but the country did not collapse. Stores still opened and sold things, though an item costing one Mark ballooned upwards to 100 billion marks. People were buying anything they could, even hair pins to try and retain a portion of their wealth.
The ones who stayed wealthy, were the ones who purchased gold and silver before the economy started it’s death spiral.
Look at Zimbabwe, they managed to get their bank notes up to 100 trillion dollars.
Then there is Argentina, and Venezuela, they also have went down the proverbial toilet, with all of the known symptoms of a economic collapse, but nothing like the SHTF/Mad Max scenarios that most people say will happen. Their money is worthless, metals are king.
Gold and silver are the easiest and simplest ways to protect and retain your wealth during events such as these. And yes, metals will be used in barter, ignore the naysayers.
I couldn’t agree more, Ron! If history tells us anything, it’s that precious metals will always have value.
-J