Is Investing in Gold and Silver a Good Idea?

Precious metals have long been considered a sound part of individual investment strategies. Demand for gold bullion or coins remains strong, whether as a hedge against a potential collapse of the economic system or merely to round out a portfolio. As with any commodities, stocks, bonds, or futures trading, rewards can be substantial. Care should be taken, however, as the penalties for rash investment can be substantial as well.

Persons considering adding gold or silver to their portfolio should thoroughly familiarize themselves with all aspects of the market before investing in gold bullion or coins. There are many different opportunities, not all of which are safe. It is usually best to consult with a professional with a full understanding of the market before beginning. For instance, there are discrete differences between purchasing bullion and investing in gold coins. Bullion is usually available in ingots or bars, and is sold in quantity by banks and some of the larger dealers. Coins are minted from gold or silver, and are available for purchase from a larger variety of outlets. Many countries mint gold and silver coins, including the US Mint, but not all guarantee the precious metal content, or adhere to the rigorous standards of the US Mint. Unlike traditional numismatic collections, a gold or silver coin’s condition doesn’t drive its value; rather, the melt value of the gold or silver determines its worth.

Gold Investing can be a large part of one’s portfolio, and should not taken lightly. Many reputable dealers are available, but the market is not unlike any other — some dealers are more dependable than others, and choosing the wrong one can erase any advantage gained with the investment. Fortunately, it is not difficult to choose wisely. Beginning investors should proceed with caution.

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