Mistakes To Avoid When Purchasing Gold
Gold is a steady investment that always has worth and will allow you to keep your money safe while it gradually appreciates. However, you might not be buying gold as effectively as you could. Here are some tips for making sure that you're getting the most out of your money and are purchasing gold effectively. You should avoid the following mistakes:
1. Don't Jump to Respond to Sudden Market Turns
Unless your goal is to only own gold for a very short period of time, there is no reason for you to respond to every market change. For example, it is common for people to be affected by their peers who are also responding to a gold market change, such as a price increase or decrease that is in the double digits. People don't want to be stuck holding cheap gold, so they'll sell their gold quickly should the prices start to dip. On the other hand, if prices start to rise, they might buy a ton of gold all at once before prices go above what they can afford. This is only a good strategy for people who are looking to make fast money off of gold. If you are considering gold to be an investment for thirty-plus years, you don't need to respond to market changes. You just need to stay the course, purchase more gold when it makes sense for you, and ignore day-to-day fluctuations. They aren't going to matter until the end of your thirty-year holding period.
2. Don't Pay Too Much for Gold Bullion
Another common mistake is paying too much for gold bullion. If you are purchasing gold because you're concerned that gold might be the only viable currency in the future, you will want to purchase gold coins for ease of trading. Buying coins means you'll have to pay a higher premium, or higher price, to the person who is selling the gold coins. If you decide that all you need to do is purchase gold as part of your investment strategy, then you can simply find a dealer that is going to offer gold coins close to the spot price, or at a price that has the lowest premium. You will be more likely to find this price when searching out gold bullion.
3. Avoid High Markups
Finally, set a threshold for how much of a markup you are willing to tolerate. If you research the value of gold per ounce that day ahead of time, multiply it by the number of ounces that you're purchasing, and then subtract your result from the price that's being offered, you will be able to calculate the amount of premium you are paying. If you set a threshold ahead of time, you will be able to avoid making impulse decisions on gold that has a higher premium than you are comfortable with.
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