Buy gold

Gold has captivated humanity for over 5,000 years. This shiny precious metal is treasured in various forms, from jewelry to coins used as currency. Throughout history, gold has symbolized wealth and power.
 
Today, buying gold is primarily an investment or an alternative to saving money. With current savings accounts offering little to no interest—and even the potential for negative interest rates—gold presents an attractive option. Investing in gold diversifies one's portfolio, which is crucial in volatile and uncertain times. Unlike global currencies and stock markets, gold has consistently maintained its purchasing power and intrinsic value.
 
Over the past decade, the price of gold has risen by more than 85%, making gold investment increasingly common. The advent of the internet has simplified the process, allowing small investors and savers to purchase gold online, have it delivered, or store it in secure vaults.
 

Tip 1: Ensure Physical Possession

When buying gold, it is vital to ensure you physically receive the gold. Some investment methods involve only paper transactions, where you never actually hold the gold. These can be risky. For example, purchasing gold directly from African mines at a significant discount often sounds too good to be true, and it usually is. A recent criminal investigation revealed that since 2015, €50 million had been invested in such schemes, with only a fraction actually going towards the mines.
 
Approximately 100 times more gold is traded on paper than is physically available worldwide. Digital investments like futures and ETFs often do not grant ownership of physical gold, making them suitable for speculation rather than preserving wealth.
 
Always buy gold from a reputable supplier who delivers physically. Check the supplier's reliability through their reputation. An AFM license often indicates a trustworthy dealer, and extensive positive customer reviews are also a good sign. Immediate availability is another indicator of a reliable supplier, whereas long delivery times are not.
 
For your first purchase, consider collecting your order from the dealer and paying on-site (in cash or by card) to ensure immediate receipt.
 

Tip 2: Choose Recognized Coins or Bars

When investing in gold, you will encounter a wide variety of coins and bars in different weights and purities. What should you choose? Investment gold is exempt from VAT, making it cheaper than collectible coins or lower-purity gold. Depending on your budget, you can choose between coins and bars. High-budget investors often opt for large gold bars (e.g., 1 kilogram bars, currently valued at about €37,000 each). The downside is that you must sell an entire bar at once, as you cannot cut it into smaller pieces.
 
A practical alternative is investment coins not circulated as currency. Popular options include the gold Krugerrand and the gold Maple Leaf. These coins are available at a low premium, are highly liquid, and easy to resell.

Tip 3: Avoid Over-Focusing on Gold Prices

Gold prices fluctuate daily, sometimes significantly. It can be tempting to sell gold when prices are high to make a profit. However, buying gold should be a rational decision aimed at preserving purchasing power and saving money. Therefore, it is advisable not to focus too much on short-term price changes and instead maintain a long-term perspective, keeping gold in your portfolio for an extended period. Physical gold investments come with associated costs, making them unsuitable for short-term trading.
 
Gold prices can be volatile and unpredictable. For instance, the price rose by about 8% when Donald Trump won the 2016 election, only to drop back to pre-election levels months later.
 
If you wish to time your purchase, consider buying gold in stages. By converting a portion of your budget into gold every 2-3 months, you can average the purchase price over a longer period.
 
Gold should be seen as a long-term rational choice. It is generally advised to allocate 5-10% of your portfolio to gold. This proportion is significant enough to offset fluctuations in other areas.
 

Tip 4: Secure Storage

After purchasing gold, the next challenge is finding a suitable storage location. Many individuals store their gold at home, which is common in Germany, where about 75% of physical gold buyers keep it in or around their homes. This is feasible as long as the value is not too high. For larger amounts, consider specialized storage options.
 
Gold investment aims to manage your wealth outside the financial system. Therefore, it is advisable not to store your gold in a bank, as this contradicts the purpose of withdrawing money from the banking system. Banks have a history of bailouts and bail-ins, making it undesirable to store gold with them.
 
Secure, insured storage is available for about 0.65% of the gold's value annually, covering insurance and personal vault storage. The Silver Mountain has an exclusive partnership with Edelmetaal Beheer Nederland, where you can store your gold and silver.
 
When dealing with storage providers, ensure you can easily retrieve your gold and that it is stored physically and personally. Avoid arrangements where you own a portion of a large gold bar with multiple owners, as you may not have straightforward access to the physical gold.
 

Tip 5: Keep Your Gold Ownership Private

Finally, the fewer people know about your gold holdings, the safer it is. While it may be tempting to brag about your gold during price surges, discretion is key. During the Bitcoin hype in early 2018, many claimed to be investing in cryptocurrencies. Those who truly profited kept it private, while those who bought at the peak and sold at a loss remained silent.
 
By following these tips, you can make informed and secure gold investments to protect and preserve your wealth.
 
Disclaimer: The Silver Mountain does not provide investment advice, and this article should not be considered as such. Past performance is not indicative of future results.