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Entry bubble Investing in Gold

By: Nancy | January 24, 2008 | Category: Money

stack of gold coinsOn January 24, 1848, a few glistening flakes of rock, plucked from the water near a California sawmill set off America's first gold rush.  But I've been noticing a new gold rush under way. TV news shows, infomercials and newspaper ads are popping up all over encouraging people to invest in gold as an alternative to stocks.

During changing or uncertain financial times when stocks and the value of the dollar go down, gold prices often tend to go up, as people see gold, a commodity they can actually hold in their hands, as having ultimately more value to them than less tangible investments like stocks. And as more people buy gold, the demand drives up the cost.

Financial experts disagree on whether gold is a good investment. Some recommend buying just a small amount as part of your investment portfolio  because of the highly fluctuating nature of its value. Others say buy lots; and others say don't bother with gold at all. The choice is yours.

There are a number of ways you can invest in gold,  including bullion, certificates and coins. Most people look to an investment advisor or company to guide them in making a choice. But before you entrust someone to invest your money in gold or anything else, check to be sure they're licensed with your state securities administrator. If an individual broker or an investment company won't give you a thoroughly prepared prospectus--a formal document detailing the plans, risks and cost of their services--or promises you a quick or high return on your investment, be suspicious. See ConsumerAction.gov for more ways to tell if an investment broker is on the up and up.

If you're considering buying gold coins, the U.S. Mint's American Eagle Gold Bullion Coins are the only gold coins that are guaranteed by the U.S. government in terms of purity, weight and content. They're available from precious metal or collectible coin dealers, certain banks and brokerage houses. If you're considering investing in coins produced anyplace by the U.S. Mint, read up on buying gold coins and investigate the seller and the coins carefully to help ensure that you're getting coins that match the value the seller is promising.    

Don't have a stomach for investing in the gold market?  You can still look for it the way they did 160 years ago at Sutter's Mill. Go west, young man or woman and start panning.

| Post a Comment | View Comments [7] | envelope E-mail This Entry | Tags: gold   investments   nancy   stock  

Comments (7):

blue comment bubble Posted by bettybaldwin on January 25, 2008 at 03:59 PM EST

I'm really interested in investing in gold. I never really thought of gold as a good investment until I heard Johnathan Rose (sp?) from Capital Gold Group talking on the G. Gordon Libby radio show. I decided to do some research and came across your blog. I think that it makes sense to invest in gold. After all, people all over the world want gold. Even if the dollar is worthless, you can always trade your gold ring for something.

Thanks for all the info on gold.

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blue comment bubble Posted by srob1209 on January 28, 2008 at 12:57 AM EST

I just came across an article by Addison Wiggins about investing in gold that is 100 percent backed by the government. It is in the outstanding Investments news letter. Has anyone else heard of this?

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blue comment bubble Posted by Citizen Jmaximus on January 28, 2008 at 07:33 AM EST

Gold is more of a store of money than an investment. It was good money 3000 years ago, and it will be good money 3,000 years from now [probably]. The dollar will be long gone by then, maybe ten years from now if things keep heading in the wrong direction.

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blue comment bubble Posted by wtc911coins on June 19, 2008 at 08:38 AM EDT

Gold coins or gold bars will be a save investment in the long term but could in the short term go down to the $450 level. As the dollar comes back gold will most likely fall in value. If oil price start to fall again gold could fall with it.

Some times it would be smart to find the really limited supply of gold coins as a hedge against falling gold prices. I think the WTC coins made of gold silver and platinum could be this kind of investment.

wtc911coins

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blue comment bubble Posted by Brian Brown on October 18, 2008 at 01:30 PM EDT

This is a great article on resources for people first looking to start a gold investment. I wanted to comment on just one suggestion you made, and I hope it adds to the value of of the information you provided.

You mentioned that, "Most people look to an investment advisor or company to guide them in making a choice."

Keep in mind that an investment adviser will almost never recommend buying physical gold, which is the type of gold most gold investment books and websites would suggest that you buy.

They will instead suggest gold futures, EFTs, "paper" gold, or other options where the end result is that you don't actually own a piece of gold that you can take home with you.

The reason they do this is because selling real physical gold does not produce a commission. They don't get paid if you use this option, but many authorities on the subject believe this is the best way (or the only way) to buy gold.

I just wanted your readers to be aware that when they speak to their financial advisers, that they will most likely be lead away from the option of real, phyiscal gold and don't be discouraged...keep asking them about it. Even though they don't want to sell it, they will usually be pretty knowledgeable about the precious metals market.

I hope this helps, and again, great article.

-Brian Brown, author of www.silverinvestment.org

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blue comment bubble Posted by Trailmix.Net on November 19, 2008 at 10:07 PM EST

If you want to learn more about the sawmill in CA you can read about it here:

http://trailmix.net/blogs/barlow/archive/2008/10/27/exploring-gold-rush-history-on-the-monroe-ridge-trail-in-coloma-ca.aspx

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blue comment bubble Posted by TM Breffle on February 20, 2009 at 04:19 PM EST

I have 10 1oz Canadian Maple Leaf gold coins, purchased in the 60's, which I am interested in selling now that gold is in the high 90's. I know nothing of how to go about this... All phone numbers seem to be 1 800#s. I would rather deal locally, Denver Area. When they say will pay $55.00 over spot, also some say no commission to buy, what does that mean? I have not talked to anyone all info on the internet. Can someone out there help me to avoid pitfalls...... Thanks, TM ...

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