A lot of people fall into the trap of thinking that they don’t have to physically own their precious metals. Either they think they can leverage their position better by buying mining stocks, or they think the futures contracts or ETFs they own are as good as gold. As I have mentioned, that’s just plain stinking thinking.
First off, if you are reasoning “ Mining stocks give me leverage; I will just buy some stocks” then think again. First, if everyone just bought mining stocks, and no one bought physical gold and silver, then the price of gold and silver wouldn’t rise. In fact, it would fall because of a lack of demand, while all the extra funds available to the mining sector because everyone was buying their stock, would then spur increased supply. Second, mining stocks are stocks. They are not gold and silver. They are shares in a company that processes gold and silver. As such, they are subject to market conditions such as a currency crisis or stock market crash. Gold and silver, on the other hand, could rocket to the moon while the mining stocks fall.
Go to the Mattresses
As I have mentioned, the first thing you want to do to buy precious metals is to find a trustworthy dealer that will give you good services and advice. To purchase physical gold and silver there are basically two kinds of dealers to choose from online bullion dealers or coin shops.
Form or Function
One of the most important decisions to make regarding gold and silver in your possession is, What form should I buy? Bars, old U>S> silver coins, Maple leaves or U.S. Eagles? To answer that you have to ask why you want to hold gold/or silver at home in the first place. For most people, the reason to have gold and silver at home is to have a private investment, and also as an emergency currency and portable wealth.
Storing Your Gold and Silver
Once you have got your gold and silver you need to decide where you are going to keep your stash. This has always been a problem, and it is a good problem to have, but there is no easy answer.
- Safe Deposit Box
- A hidden floor safe or wall safe
- Vault storage
From the book: “Guide to Investing in Gold and Silver” by Michael Maloney
