A study by Ibbotson Associates, commissioned by Bullion Management Services Inc., confirms that holding a percentage of an investment portfolio in precious metals increases portfolio returns over time. It’s portfolio diversification that makes the prudent investors beat the average investor.
For some gold stocks will be the avenue for diversification, while many other investors will choose gold coins. Now adding gold coins to your portfolio comes down to choosing what dealer to buy from. In this article we’ll explore the best practices for buying gold coins on-line.
What to Look for in an On-line Coin Dealer
These steps assume you have chosen the type of gold coin. Otherwise, you should pick which gold coin first. Most investor stick to the American Gold Eagle or Buffalo. After choosing which coin you’re going to buy, come back and read the advice about choosing a dealer to buy from.
1. Chose a bona fide coin dealer. — In some cases you can buy directly from the mint. For the Canadian Maple Leaf, from the Australian Mint, and even some mints in Europe. For the U.S. buyers, as of now, you can not buy directly from the U.S. Mint. You can, however, buy from a list of retailers recognized by the U.S. Mint.
If you decide not to look for a dealer in the list, be sure to find a dealer who lists contact information on the website. At the bear minimum a phone number and address of the coin dealer. Look for the ‘About Us’ page on the dealer’s website to find all the contact information. All the bona fide coin dealers will list contact information.
2. Chose a secure dealer. — Even some bogus coin dealers will list contact information, so in addition to phone numbers and addresses, you should look for a dealer with a secure server. Once you begin to check out, look for the sign of a secure server, which will have https:// where as a non-secure dealer will not (eg. http://). Another sign of a secure dealer is any ratings on-line or with the Better Business Bureau.
3. Chose a dealer offering a return policy. — All legitimate dealers will over a return policy of some kind. Make sure to find and read the return policy on the dealer’s website. A strong return policy acts a risk eliminator for the investor. The policy clearly states that the company is or isn’t behind the value they offer. If they don’t have a strong return policy that should clearly tell the gold investor to move on.
There is an art, but also science to finding the best gold coin dealer. In reality, there might not be just one. There could be two or three that fit your needs as an investor or as a collector. So, the real question is after you’ve found the right one or two, will you be able to go a head and start investing in gold already?