Investing in Precious Metals

Gold and silver fever grips investors


...on Friday silver pushed above $40 a troy ounce for the first time since 1980 and gold pushed to a new all-time high in nominal terms at $1,474.19.

Comment: Last week I did my Investing in Oil piece. Today investing in precious metals.

  • Should you? The problem with investing in precious metals is that you don't want to buy high! And gold and silver have been high and have dropped. Investors don't really know it they will go higher. I would not put all of one's eggs in one basket with metals. But it wouldn't hurt to have some metals
  • Investing options
    • Buy the real thing. One option that I have used is American Precious Metals Exchange. One can buy 20 American Silver Eagles for about $ 800 or one Gold Buffalo Coin for about $ 1475. Keep in mind that coins need to be stored (safety deposit box or personal safe. And they do not pay dividends. There is a cost to purchase (shipping) and for selling (shipping or a trip to a coin shop). Some years ago I bought 20 silver coins on Ebay and the guy stiffed me. I finally got my money back but it wasn't easy. They guy shipped me 1 coin and so had proof of shipping something. It was just 19 lite. I wouldn't recommend the Ebay option
    • Investing in a Precious Metal ETF: Two options are IAU and GLD

Recommendation: I really don't have one but probably if I were to invest in bullion it would be a small percentage of my total portfolio (less than 5%) and either through an ETF or coinage.

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