Some investors prefer to buy gold from local merchants, allowing them to physically inspect the gold and pay for it in cash. However, local dealers tend to have higher prices than online retailers, as well as a smaller selection. Online gold retailers may offer lower prices, due to their higher volumes. At first, it seems that buying gold and silver at a local metallurgy has several advantages.
You'll receive your purchase immediately, instead of having to wait for shipment. You know exactly where you got the ingots and the person who sold them to you, so if there are any problems you know exactly where to go. Some people assume that this gives them more protection against fake or overpriced products. The two most common places where you can buy precious metals are at an online dealer, such as JM Bullion, or at a local coin store.
Local coin stores have been around for almost as long as money. They went from being pawnshop establishments to becoming a more specialized form of resale stores. Local coin stores offer customers a place where they can view their items in person before making purchases. Online dealers, on the other hand, are obviously a more recent development.
They serve as a virtual showcase for precious metals companies and allow customers to shop online. It's good to have gold or silver right away, but waiting a few days to get the gold can save you a lot of money. As you move from researching gold to buying gold, it can be helpful to examine the pros and cons of buying gold locally and buying gold online. Owning stocks in a gold mining company or a gold ETF exposes you to the gold industry and, since gold doesn't necessarily move in conjunction with the stock market, it can help to further diversify your shares.
Gold futures are more liquid than physical gold and have no management fees, although brokerage firms may charge a trading fee (also called a commission) per contract. Adding gold to your portfolio can help you diversify your assets, which can help you better weather a recession, but gold doesn't produce cash flow like other assets and should be added to your investment mix in a limited amount and with caution. Many gold buyers enjoy the freedom to buy gold online, where there are no intrusive sales representatives and can buy when, where and how they want. Gold traders usually charge more than the “spot” price of gold, or the price at which it is listed on a commodity exchange.
While owning gold sounds great and can even be considered responsible during a stock market crash, investing in gold comes with some unique challenges and doesn't always turn out the way you might expect. The recent increases are more than encouraging for gold buyers and holders; historically speaking, gold has maintained a positive return for 12 of the past 15 years. Investing in gold mutual funds means that you own shares in several gold-related assets, such as many companies that mine or process gold, but you don't own real gold or individual stocks. Investing in gold stocks, ETFs or mutual funds is often the best way to expose yourself to gold in your portfolio.
Gold is reputed to be a recession-friendly investment when the stock market retreats sharply and the price of gold often rises. Gold-traded funds or mutual funds have more liquidity than those that hold physical gold and offer a level of diversification that is not offered by a single stock.