First time precious metal investors and collectors are often faced with many difficult questions. What type of gold and silver should I buy? Should I purchase bullion coins or bars? Should I purchase numismatics? How much should I buy? Where should I buy my precious metals? What is a fair price to pay for my precious metals? We at New Orleans Silver and Gold understand the challenges faced by new investors and have compiled four tips to help investors make educated decisions when purchasing precious metals.
#1 Ask yourself are you an investor or collector?
The first question any newcomers to the precious metal market should ask is do I want to be an investor or do I want to be a collector? This is a very important question because there is a noticeable difference between a collector and an investor. Collectors typically do not seek out precious metals as a financial instrument, but rather collect precious metals for personal enjoyment. Investors, on the other hand, usually seek out precious metals as a long term savings vehicle to hedge against inflation and currency risk.
#2 Know what you are buying
There are many different kinds of precious metal investment products available for to the first time investor or collector. Each product has some unique advantage and or disadvantage. It is up to the individual investor to educate themselves about the advantages and disadvantages of each precious metal product, and to select the proper products necessary to fulfill each investor’s objective. One important factor to consider when choosing different precious metals products is the buy-back price of each product. Investors should understand that some products have a higher buy-back price than other investment products. New investors and collectors should understand these distinctions and incorporate them into their precious metal decision process.
#3 Devise an investment strategy
Once new investors and collectors have carefully considered tips one and two, it is now time for them the devise a custom individualized investment strategy. Different financial advisors will have conflicting opinions on what they believe is the proper ratio of precious metals one should have in their portfolio; some argue 10%, some argue 20%, and some argue 33%. At New Orleans Silver and Gold we are not financial advisors, and do not offer recommendations concerning each individual’s specific investment strategy. It is up to each individual investor or collector to choose what they believe is the most advantageous financial strategy for them. We do recommend, however, that all individuals have some exposure to physical precious metals (regardless of the amount).
#4 Know the law
The sale of precious metals is subject to a number of federal and state laws. It is important for new investors to educate themselves about these laws. Perhaps the most important of laws to new investors is the Louisiana state law which requires that a vendor asses a 9% tax on any purchase of precious metals under $1,000. If you have any other questions about the laws governing the sale of precious metals please contact one of our representatives at 504-858-GOLD.