Tuesday, April 24, 2012
How to buy gold
Most people still don't get gold at all. That's fine.
And you get that the Value of gold as money is increasing every second, just as the value of the dollar is decreasing every second (Irrespective of meaningless metrics like the "dollar index" etc.)
Not everyone gets that. But let's say you do. But it only just dawned on you recently and now you wonder: What to do about it?
Step one. Buy real gold. Buy bullion. Buy gold coins from central government mints. Buy steadily, and store it in a safety deposit box or a safe. Buy from huge volume dealers. Call up your local comex repository like MTB, or go online to a retail giant like Apmex. I get nothing for recommending these sellers.
Step two. Stay away from paper gold. Gold stocks are paper. They may represent ounces in the ground, but they are not ounces in the ground. Futures are paper. They do not settle. They are a trading vehicle only. Tracking stocks like GLD are stocks. They are liquid - right now. But it's not possible to know if they hold gold in their vaults. And even if they do, it's not your gold.
Step three. If and only if you have a very strong knowledge of world history: buy rare numismatic gold art. This does not include US gold. That market is mature, because many Americans do know US history and have bout the hell out of that market. But if you know European, Medieval, Byzantine, Ancient History, you can understand which gold coins are of immense historical value, and you can find them at auction or on line. They constitute GOLD ART and they are very very cheap compared to all other forms of art.
Step four: Do not worry or even monitor the Paper Price of Gold as regulated buy the highly manipulated futures market. It is irrelevant since you are not trading gold. Do not pay any attention to "Historical Metrics" and "ratios." The gold-silver ratio, the gold to SP ratio, the gold-gold stock ratio, the gold-anything ratio is meaningless.
Addendum: If you do not "Get Gold" but are wondering about it: study hard. Do you own work. Read the history of the world economy. Read the history of money. Because if you are borrowing investment ideas from others you will be the proverbial "weak hands" that buy at the top and bail out at the bottom.