When the economy takes a nosedive, some wise investors diversify their investment portfolio to include forms of investments that are relatively safe, such as precious metal investments. Unsurprisingly, a majority of such investors go for gold bullion. However, before investing in gold, it is important to be aware of the different types of gold investments in order to understand which gold investments match your personal investment needs and expectations. It is important to learn more about gold bullion coin investments as well as some inherent pros and cons of such investment options.
Types of Gold Coins
In general, there are two main types of gold coins: gold bullion coins and numismatic (collectors’ coins). Most investors opt for the former because their prices tend to be more predictable. This is because unlike the latter, their price depends mostly on the gold spot price. The most popular types of gold bullion coins include the following:
The Pros and Cons of Physical Gold vs. Gold Stocks
Advantages of Investing in Gold Coins
• Gold coins are an affordable form of investment: You can acquire a considerable amount of coins for as little as $1,000. The relative affordability of gold coins in comparison to other types of gold investments makes them suitable for investors who want to invest in gold gradually so that they can analyze the state of the gold market.
• Limited supply: Because of the limited supply, the demand for such is continuously increasing and investors who own gold coins reap great rewards when they sell their coins.
• Easy to sell: Bullion coins are by far the most liquid form of gold investments. As such, the sale process of gold coins is very fast and investors can easily exchange their gold coins for money.
• Easy and safe to store: One of the greatest drawbacks of physical gold investments is the fact that investors have to deal with the significant risk of theft. However, because gold coins are more portable, investors can move them easily from one storage location to another more frequently to lower the risk of theft.
• The value of gold bullion coins remains constant even in times of economic instability: In a volatile economy, investors whose investments are in form of paper money have to deal with the risk of inflation and devaluation of their assets. However, the devaluation of paper money does not affect the value of gold.
Disadvantages of Gold Goin Investments
• The prices of gold bullion coins tend to fluctuate immensely in comparison to the price of other forms of gold investments.
• Gold coins are more valuable as long term investments. It is nearly impossible for gold coin investors to get great rewards for their investment in short term trading.
• It is impossible to invest in gold coins if you do not have cash. Gold dealers prefer to exchange gold for cash and do not accept credit card payments.
When it comes to gold investment options, returns vary across the board. Therefore, before investing in gold coins, ensure you have all the information you need to make great investment decisions so that you can reap maximum rewards from your investment.
Author: David Kennedy Google+