How to Buy Precious Metals & Avoid Scams
Investing in gold, silver and other precious metals is a sound strategy, and a good way to diversify your portfolio and hedge against inflation. Unfortunately, however, there are a lot of scams involving these kinds of investments, from coin dealers who sell products with extraordinary markups to outfits that claim to hold gold that does not exist. Falling for one of these scams could leave you considerably worse off financially, so you need to employ the right strategies to avoid being taken.
Other People Are Reading
Instructions
-
-
1
Avoid collector coins as an investment, unless you are an expert in the field. The collector market in gold coins relies not only on the underlying price of an ounce of gold but on the desirability and rarity of the coins themselves. These factors can change overnight, rendering a once-valuable coin nearly worthless while causing the value of another to skyrocket. In addition, the markup on collectible coins can be very high, leading you to pay far more for the coin that what the actual precious metal is worth.
-
2
Consider investing in stocks of gold-mining companies, or in mutual funds that hold gold-mining and exploration stocks. Most mutual fund families include at least a few funds that invest in companies in the precious metal business, both general funds that invest in all aspects of precious metals, and specialty funds that invest in a particular aspect of the business, such as silver stocks or uranium-mining companies.
-
-
3
Check out exchange traded funds that track the price of gold. These exchange traded funds, or ETFs, are among the best ways invest in gold, silver and other precious metals. One of the most widely traded precious metal ETFs tracks the price of gold and trades under the ticker symbol GLD. A similar ETF that tracks the price of silver trades under ticker symbol SLV.
-
4
Watch out for companies that make outlandish claims about the price of gold. Companies promising 50 percent to 100 percent returns or more are most likely scams. Keep in mind that if it sounds to good to be true, it probably is.
-
1
References
- Photo Credit lingots d'or image by dead_account from Fotolia.com
More Like This
Comments
-
I just read two seperate, and completely different articles, both by ehow, about avoiding scams. By completely different I mean one said to avoid etf's like the plague, the other says they are the best. Gold mine stocks are good, gold mine stocks are bad. Who edits these things?
