There is no doubt that we are in times of economic and geopolitical uncertainty. Greece, Italy, Spain, and France are all contributing to the Euro?s problems, and in the U.S., the Fed is injecting huge amounts of money into the economy just trying to keep it afloat.
In times like these people have profited from buying gold and silver. And investing into gold and silver through the last decade have been profitable trades. Many investors use the ETF?s GLD for gold and SLV for silver to do so, however if you want to hold the bullion or coins you can do this as well.
For this reason we contacted Yitzchok Kahan of Bullion Trading LLC, a precious metals specialist, to answer our questions regarding how and why to take possession of the metals.
REL: Gold has come a long way from the year 2000, is this really the time to buy gold and silver? Am I going to profit from buying now at these prices?
I cannot honestly predict whether or not you will profit or, based on the specifics, whether or not right now really is the best time for you. What I can tell you is that the market has definitely had a fantastic decade, and reached all-time highs in the past year. Right now is definitely a good time to keep an eye on gold and begin doing research for what investment strategy could work best for you. I know that much. I also know that people worried about this same question for the last several years, yet their investment have consistently paid off as gold jumped from $300 to $600 to $1000 to $1500 and so on.
REL: How long have you been investing in gold and silver? What was your background before you were investing?
I have been investing in gold and silver all of my life, as this happens to be a family business and so my background has always been rooted in this market. My father started this business in 1969 as a jeweler. In time, this evolved into refining, then coin retail, and we have been a gold bullion dealer since 1981.
REL: Why would an investor want to buy physical precious metal commodities to begin with?
Unlike stocks or other investment vehicles, precious metals are the only form of wealth that has been valuable since Biblical times. Gold has a proven track record and is the safest way to store your wealth. Purchasing a bar of gold is essentially the same as depositing your wealth into a bank that you know will never go out of business and never charge you fees. Centuries from now, the exact value of that bar may have changed from the time of purchase, but you know that it will always be valuable. In short, gold is money, even if it is not in fiat-form.
REL: In the event that things really turn south in the economy and paper currency becomes inflated and of less value, do you believe that gold and silver coins would be a tradable commodity?
I do not believe that there will ever come a day that one can walk into a Wal-Mart and use a bar of gold to pay the cashier for his day-to-day purchases. Paper money has been the norm, and is more manageable to carry around. Also, Wal-Mart will never allow one of their cashiers to determine the authenticity of a gold coin or bar. However, I can see gold and silver being used by customers as means of personal barter with private vendors. For example, someone may use a gold bar to pay their plumber for an expensive job.
REL: If I buy through you how do I receive the actual bullion?
You may receive the bullion by coming in and picking it up. We can also ship it out to you; sales can be made in person or through our website.
REL: Can you store it for me? At what cost? Do I place it into a bank deposit box?
Yes, we can store your bullion for you; however, we strongly prefer not to and encourage you to take possession of the item as soon as possible. We feel that your purchase is your responsibility and it is best for both parties that you store the item in a manner that is most convenient and accessible to you. We would rather not be held liable for someone else?s property.
REL: What should I buy? Bars or coins? Is there a difference?
No, I do not feel that there is any real difference. The only slight issue to consider is that coins, being minted by a government, have different premiums that will affect the cost when buying and selling. However, the investment value is the same. Gold is gold.
REL: If I am holding the metals, how do I sell to get the best price?
The best advice I can give is to try and sell your item back to the place you originally bought it from. The price they offer you will most likely be the closest to what you paid. Furthermore, since you already know they are reliable, you will have built a prior trust with them and know they will not try to scam you or switch it out with a fake bar.
REL: Some people believe that metals are in a bubble that is going to pop soon. What is your response?
Of course anything is possible, but I feel that there are ?two sides to every coin.? There are those who feel that gold is in a bubble, and there are also those who feel it is still undervalued. Right now if the economy is improving then gold will see some headwinds, but in the event it goes south once more, the interest in gold will last. I remember thinking that the housing market bubble was going to pop back in 2003, and it ended up lasting another five years.
REL: Warren Buffett does not invest into metals because he says they only trade on intrinsic value and cannot produce a product or service. And recently the Berkshire vice chairman Charles Munger stated ?I think civilized people don?t buy gold, they invest in productive businesses.? What say you?
I am not competing with Warren Buffett or Charles Munger. Those men have a different degree of wealth than you or I and therefore have different concerns than the common man. Perhaps they are in a position to invest in productive businesses, but gold makes an easier investment for a person with a simpler lifestyle. Plus it?s something to keep in your pockets! If there was a major economic crisis or a bank holiday, Warren Buffett and Charles Munger would have enough money to survive, while the common man would struggle. Gold will be far more useful to the common man at that time than it would to the super-rich. I recently saw an article where someone responded to this claim by saying: ?Here?s a question for Warren Buffett: if you had choose one item to store away for a hundred years as a gift for your great-grandchild, what would you choose: stock in a productive business, a large fortune in U.S. dollar bills, or several gold bars?? Given the unreliability of the stock market and the inflation of the dollar, I think it is clear that there?s only one safe option to this question, and even Warren Buffett and Charles Munger would have to admit to ?not being civilized people? under that situation.
REL: What is the best way to get started investing in precious metals?
The best way to get started is to dip your toe in the water. That means buying something and going from there. I do not feel that anyone should tell you what to buy; whether it be gold or silver, bars or coins, that all depends on your situation and what you feel comfortable investing in. The only advice I would give is not to start with numismatic coins as those are geared more for collectors than investors and have high premiums, and when the time comes that you should decide to sell it, you will have a hard time getting that premium back.
Related Posts:
Related posts:
- What you should know before investing in Gold or Silver
Source: http://www.bulliontradingllc.com/News/2012/10/interview-on-investing-in-gold-and-silver/
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