The investor should be fully aware of the reasons why he/she is investing in the physical metal. The most obvious reason is that physical ownership protects the investor against the continuous debasement of paper money. So, it is probably best to have the physical metal in a form widely recognized & accepted among the citizens of the world. It is advisable to stick with internationally recognized bullion bars and coins such as the American Eagle, American Buffalo, Canadian Maple Leaf, Austrian Philharmonic, South African Krugerrand, Australian Kangaroo/Nugget, Chinese Panda & the Mexican Libertad. The reasoning here is that all these brands have well-known gold content and weight-to-size specifications that can easily be verified. Additionally, it is best to stay away from antique, specialized numismatic and commemorative coins unless the investor has extensive knowledge in those areas.
Basically, there are three steps involved in obtaining physical precious metals. All steps should be researched to the investor’s satisfaction before taking any action.
- How much physical metal will be purchased?
- From where will the metal be purchased?
- Where will the metal be safely stored?
All of these decisions are closely tied together. It is advisable not to take any action until all three decisions have been made.
How much metal to purchase is a decision that depends on individual circumstances. But if one has a target quantity of metal they ultimately want to own, it is not always a good idea to buy it all in one big chunk. It is a fool’s game to try and time the market by trying pick the absolute bottom, so one shouldn’t even try. Instead, Dollar Cost Averaging is a good way to play the physical metals market. Buying in little tranches during the bigger dips along the way has been a successful strategy during the past decade, especially so over the past 2 years.
Once the quantity of metal has been decided, it must be determined from where, or from whom, the metal will be purchased. Significant amounts can be achieved by the average investor via bullion dealers or brokers. (See our links page for some recommendations.) For smaller quantities, especially spread out over time, it is also possible for the buyer to obtain some good deals on Ebay, provided the buyer does so with patience and a strict adherence to a sound bidding strategy.
Finally, one needs to decide what they’re going to do with the metal once it’s delivered. There have been horror stories regarding home burglary, which may scare some people away from having their metal stored in their own homes. And for some, the home-storage option is simply not possible. A safety-deposit box at a bank is one choice. Though, given the economic uncertainty of the banking system these days, some argue that private wealth should be kept out of the banking system entirely. Therefore, an alternative would be storing the metal with a firms such as Gold Silver Vault or First State.
In any event, having some physical metal which you can easily access if the need arises will be a blessing. Once the fiat currencies around the world have reached their intrinsic value (=zero), having something of tangible value in your hands becomes paramount to success, and may even make the difference between financial survival and complete loss.