How To Invest in Gold Bullion Coins

How to Safely Purchase Gold Bullion Coins as an Investment

Gold coin collection

Most portfolio managers recommend that people keep between 10 percent to 35 percent of their wealth in precious metals. Gold is currently a hot topic on the news and you may be wondering how to safely incorporate the metal into your portfolio. There are a number of different ways you can invest in gold, and one of the most popular is through purchasing bullion coins. These are coins that are valued typically based on their gold content, and so their value fluctuates with the spot price of gold. Gold proof coins are a different area of investment, in which the coins are valued not just for their gold content but also their rarity. Follow these steps for a safe way to buy gold bullion coins. Here's what you will need: an Internet connection and a telephone and a pen and paper. You will also need money to invest that is in a liquid form (cash in a checking account). How much money you choose to invest is up to you, you do not need a lot of money to invest in gold.

Step 1

Decide how much you want to invest. Gold coins come in different sizes, denominations, and values, so you can begin investing in gold coins even with a small amount of money.

Step 2

Find a reputable gold firm. Do not invest with a firm that hasn't been in business longer than two years. Beware of buying from eBay, because of the return policy. You may think you are getting a certain kind of coin, but due to the subtleties, you could end up with a coin that isn't what you want and then have no way to return it. You will then have to sell this coin back onto the market through a gold broker or coin shop and lose money on the transaction. Research on Google different firms and call them to ask about prices. You can often get better deals by talking to a broker on the phone than simply purchasing a bullion coins on a website's shopping cart.

Step 3

Diversify your bullion. Buy several kinds of gold coins from different countries and in different denominations. Coins are valued partially by the spot price of gold, but also through the population of the coin, meaning how many have been minted. The value of gold coins is therefore determined by how much gold it contains and what the supply and demand of the coin is. The most popular bullion coins are the American Eagle, the Canadian Maple Leaf, the Austrian Philharmonic, the American Buffalo, the French Franc, the South African Krugerrand, and the Chinese Panda. Most of these coins come in 1 oz denominations and many of them come in fractions of that. For example, American Eagles also come in 1/2 oz and 1/10 oz denominations. Research on wikipedia the different kinds of coins and choose which ones suit your purpose.

Step 4

Call a broker to place an order. Traditionally you will be placed on a recorded confirmation line to lock in the price and then you send a personal check, money order or cashiers check to fund the purchase. Your gold will then be shipped directly to your home. Firms usually mail the gold through the U.S. Postal Service because mail theft is a federal offense, so it is the safest way to transport gold to you.

Purchase and hold. Gold is a strategy to store your wealth for the long term to protect against inflation. Due to broker fees and the volatility of the spot price, attempting to "day trade" with gold to make gains can be difficult for the inexperienced investor. When you do decide to liquidate, you can do your broker a favor and offer to sell it back to them first and sometimes they will wave the fees of buying back the coin.

Maureen has been investing in gold and other precious metals for several years. She is a practicing architect and freelance financial writer.

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