If you plan on investing in precious metals in the near future, you must be careful when doing so. There are people out there that want to take advantage of you and take your money. There are even unscrupulous salespeople at legitimate precious metal dealers that you must be aware of.
If you are going to buy precious metals, you will need to see a legitimate dealer at a legitimate company. One that you can trust is metal-res.com and they can help you to find what you are looking for. They specialize in selling precious metals and other investments.
This article will share some of the hints that you need to know about before you invest. There are more things that you should know about, but you can do some research and find some more. You just need to very careful when you are investing your hard-earned money in precious metals.
- Say “NO” to Pushy Salespeople
You do not want to feel that you were forced into buying something that you were not sure about buying. Learn to say no and to mean it when salespeople begin to get pushy. Be prepared to walk away with your precious metals if they say that you need to buy it now. Also do not fall them telling you that you will need to buy it now before there is not any more to buy. There will be other people who you can do business with that will not be pushy.
- Check Out the Salesperson Before You Buy
While there is no single data base that tells you which salespeople you can trust, there are agencies such as the Better Business Bureau that can help you out. You can check the BBB to see if the company you want to buy from has any bad reviews. You can also check with the searchable data base with the US Mint that has a list of coin sellers. Another place you can check is the National Futures Association’s BASIC, which will give you a list of registered firms or individuals. You can also check with other organizations that can help you to find
- Do Not Listen To “Low Risk”
There are no “low risks” in buying precious metals, even though salespeople will tell you that. If they try to tell you that purchasing physical metals are lower risk than others, walk away. There are risks to buying any type of precious metals, even physical ones. With physical metals, you will need to worry about storage and price fluctuations are just as bad as other problems that paper investments may have.
- Look Out for Leverage Risk
Leverage is when money is borrowed to buy your precious metals. You might pay a part of your investment in cash and then pay for the rest “on margin.” The margined portion could be close to eighty percent of the purchase price. That means this is a loan that can cost you interest and is subject to a margin call, a call to pay off the rest of the loan that you have on your metals. You can read more about margin calls here: https://www.investopedia.com/terms/m/margincall.asp. This site can tell you all about them and why you would like to avoid them.
- Get a Full Accounting of Fees
There are all types of fees attached to buying precious metals, such as account opening fees, commissions, storage fees, and management fees, to name a few. You want to make sure that you get a full accounting of each fee, how much it is, when you need to pay it or have paid it. You want to be sure that you are not being overcharged for any of the fees, but that you are paying everything that you need to pay.
- Know the Difference Between Physical Gold and Gold Stocks
You need to know the difference between physical gold and gold stocks, they are not the same thing. Physical gold has the actual bar of gold or coin, while gold stocks are just paper proof that you have stock in gold. You might want the physical gold, or you might want the gold stock, but you must know the difference in what you are getting.
- Watch Out for Taxes
Physical gold is taxed at the collectibles capital gains rate which is more than what you would pay for gold stock investments. Since the gold stock investments are considered a long-term investment, the taxes are much lower. You must decide which taxes you would rather pay and if having the physical gold is worth the extra money.
- Precious Metals Do Not Provide Consistent Returns
With investments in businesses, you have the expectancy of having some consistent returns. Precious metals are different in that it does not make money like a business, it can gain value after a time, but not at the same rate as other stocks do. You need to be aware of that before you invest in precious metals.
These are some things that you must know before you invest in precious metals. You will want to learn more and do more research before you invest. The biggest thing is that you do not want to be taken advantage of in any way. Be careful and choose the right salespeople and the right type of gold to invest in before you spend your hard-earned money.