How to Invest in Physical Gold in a Balanced Portfolio

Lets get physical (with gold) your gold portfolio

The risk of owning physical gold is on a par with having cash or life assurance cover written by a reputable company.

In other words it is a very low risk option compared to owning stocks. It is a physical asset that can be held in ones personal possession, moved from place to place at will and used for barter.

When currencies have failed or economies collapsed gold, throughout history, has maintained its bargaining power.

It pays no dividends, need not incur any management, storage or insurance charges and while its value fluctuates according to market considerations, it is hardly likely that it will ever lose all its value, unlike stocks whose value can be wiped out in short order if one or more of the numerous risks associated with them turns nasty.

Physical Gold Owning Choices. Their merits and disadvantages. -

Buying Bullion bars are initially the most cost effective entry into the physical market.
They can be purchased in various weights from as low as one troy ounce and upwards.

Be sure to buy from an established fabricator that provides a written certification of weight and gold content

As gold is a soft metal we suggest acquiring bars that are sealed in clear plastic to prevent any accidental damage or wear causing a loss in weight or identification

Most investors are unlikely to keep their bars at home so annual storage and insurance costs must be taken into account

Many will make their investment by opening an account on line with an authorized gold depository where purchases are kept in a secure vault and can be traded as easily as stocks

If taking physical possession then renting a safety deposit box is an answer

Do not forget to check out the tax implications in your jurisdiction before deciding on investing in bullion bars

Gold Bullion coins currently or recently minted and issued by various countries offer an uncomplicated entry into ownership.

The best known are the American Eagle, Canadian Maple Leaf, and Australian Kangaroo (see below for a comprehensive list of bullion coins).

Bullion coins come in a range of sizes from as low as 1/25th of an ounce to one ounce.
The prices fluctuate throughout the day in line with spot gold prices and expect to pay up to a 5% premium.
The coins are easy to purchase on line and can be shipped to your door by secure delivery.
They are easier to securely store at home, can be traded at local coin dealers and as they age may increase in value as they become of interest to collectors.
We believe that this is the preferred investment in physical gold for the average investor diversifying a portfolio.
There is less likelihood of any adverse tax problems associated with trading in bullion coins on a limited level as they are likely to be considered as a private transaction but to be safe check it out.

Collectors gold coins include pre 1933 government issues

This is a market to steer clear of unless you are a keen numismatist as trading these coins is a highly specialized market where the spot price of gold is not the only factor to consider. 1933 was the year when President Roosevelt made holding gold coins illegal and ordered all US citizens to return them to the US Treasury where they were melted into gold bullion bars, hence the rarity.

Note that while it is an unlikely possibility that there would be another gold confiscation order issued by the US or any other major government it has happened before and could happen again.

For those intending to invest in and hold physical gold for the long haul, consideration should be given to the fact that gold bullion in depositories would not escape the net whereas bullion coins held at home or in a safety deposit box could evade the order.

A list of Government Issued Gold Bullion Coins

These coins reflect the spot price of gold plus a small premium and are our recommended entry into physical gold investment.