Gold Investment Advice For First Timers

Getting the right gold investment advice for first timers is very important because of the precious metal's unparalleled power to sway emotions or to suspend reason. The age-old saying that all that glitters is not gold underscores the difficulties involved in arriving at the right decision. The saying also gives some precious clues on what beginners should avoid.

First of all, gold stocks are not the real deal. These are mere pieces of paper making a claim for the precious metal in the same manner that property owners of old would put a stake or stakes along the perimeter of their ownership. Thus, the only way to own real gold is to have it in the form of coins or bullion.

Then there is the matter of just how pure the collection is. For example, the Canadian Maple Leaf was the purest of the pure at 99.99%; until the U.S. government came up with the American Gold Buffalo that matched the purity to exact specifications. In contrast to these two key players in the gold industry, the American Gold Eagle is only 91.67% pure.

Any sincere or well-meaning gold investment advice for first timers should be an eye-opener to such precious differences. A minter can so saturate gold to such an extent that it is no longer gold but a fancy; and yet again, all that glitters is not gold. Such moral of the story should serve as a grim reminder to the new gold investor that only extensive knowledge and research on the subject can replace emotion with logic.    

This also why it’s absolutely important to get an expert to dish out gold investment advice for first timers. One such person is Michael Kosares, author of the ABCs of Gold Investing: How to Protect and Build Your Wealth With Gold. His book title pretty much sums up why investors should make the move, especially in a time when there is so much economic uncertainty.   

As Kosares writes, gold is the only thing that does not rely on any standard except its own; in other words, gold is pretty much its own standard. To illustrate, the price of gold influences the price of silver, but not the other way around. The same goes for the dollar or any currency for that matter.

In providing gold investment advice for first timers, Kosares indicates that investors are on the right track if they are doing it to protect their investment as a whole. While it is impossible to convert all of one’s investment into gold, unless one were King Midas, a good rule of thumb to follow is the twenty to thirty percent rule. Such a prescription should satisfy even Warren Buffet, outspoken critic of gold investments.

As Buffet professes in no uncertain terms, the precious metal is a kind of irresponsible investment, considering that it tends to be preserved like a relic or stored in a vault. As such, it seldom serves a humanitarian purpose. However, the flaw in this outlook is that gold is used extensively in electronic chips and other heavy duty equipment. Further, there is no question as to its liquidity.

So far, Kosares has spent forty years of his career in the gold business. Another one of his gold investment advice for first timers: Watch out for the high-pitched gold salesman. In fact the author goes as far as to conclude that the ubiquitous TV personality who goes around buying gold from everybody may not be the best person with which to do business.

Yet another very important gold investment advice for first timers from the expert is to scrutinize each one of the precious metal’s vendors with a fine-tooth comb. It’s not enough that they have many years of industry experience and a long list of clientele. Kosares suggests that first timers check as well if there are any outstanding complaints lodged against these companies.  

Above all, do not rely on Buffet for any gold investment advice for first timers. If one follows him, brilliant that he is, no investor will ever get around to investing in gold. It only makes sense to heed the advice of someone who is a specialist on the matter.

The final gold investment advice for first timers: there is no better time to do it; now is as good a time as any. This is because gold keeps appreciating in value over time anyway, not the other way around. True, one should follow the dictum of buying low and selling high; still, it would be helpful to remember that the gold scale has two sides, and achieving a delicate balance is the key to success.