Gold in physical form can be a wise investment, since the value of this precious metal tends to be fairly stable. But before you move forward with your gold purchases, you’ll want to be aware of some mistakes people often make with gold investments. Below, the professionals from First National Bullion and Coin, San Diego gold and bullion dealers with years of experience collectors can rely on, focus on some of the more common mistakes made when buying gold.

Not Asking Questions

A reputable precious metals dealer should be more than willing to answer any questions you may have before you make a purchase. But don’t assume you’ll automatically be told everything that matters most with gold purchases if you don’t actually ask the dealer about such things as:

• Whether or not they also buy gold back once it’s been sold
• What their markup is beyond the actual value of the gold
• The type of documentation you’ll get to verify the gold’s value

Assuming Other Gold-Related Options Are Similar to Bullion

There are many ways to buy gold. But don’t assume all gold-buying options are equal in terms of what you’ll actually get. With gold-related stocks, the value of your investment is linked to the issuing company’s performance and market factors. This also applies to gold stocks purchased from gold mines. A gold exchange traded fund, or ETF, is also not the same as a physical gold purchase. A gold ETF unit is actually supposed to be about a tenth of an ounce a gold—but even this is rarely the case, according to Stockinvestor.com.

Buying without Any Goals in Mind

If you have plans to buy gold, have an idea of why you want to do this. You don’t have to fully plan every detail of your investment strategy, but you’ll definitely make smarter buys if you know what you want to do with your gold and how it fits into the rest of your investment plans. While some dealers may take the time to ask you about your goals and objectives for your gold investments, this isn’t their job. However, you can check in with a financial advisor or investment counselor if you prefer some personalized advice before you buy gold.

Making Emotion-Driven Buying Decisions

Purchasing because you wish to have an asset that’s not paper currency can absolutely be a valid reason to buy gold. What you should try to avoid is the mistake of buying mainly because of emotional reactions or impulses. You also don’t want to be overly confident with your purchases. This type of emotion-driven buying could easily backfire on you.

Falling for Scams or Questionable Practices

Scams and questionable practices can be found in a wide range of activities, including buying and selling gold. For this reason, it’s best to do your homework first and check out any precious metals dealer before you make any decisions. Look at things like:

• Online reviews
• Buying and selling practices
• How gold purchases are handled and how the gold is delivered
• The responses you get when asking questions
• Whether or not unrealistic claims, guarantees, or promises are made

Whether you’re a veteran precious metals collector or you’re interested in buying gold for investment purposes, you’ll find a fantastic variety of high-quality precious metals at First National Bullion. San Diego residents who are looking to work with only the most reputable precious metals experts should give us a call at 858-666-6570 to speak with one of our knowledgeable representatives. 

The statements made in this blog are opinions, and past performance is not indicative of future returns. Precious metals, like all investments, carry risk. Precious metals and coins may appreciate, depreciate, or stay the same in cash value depending on a variety of factors. First National Bullion does not guarantee, and its website and employees make no representation, that any metals for sale will appreciate sufficiently to earn the customers a profit. The decision to buy, sell, or borrow precious metals and which precious metals to purchase, borrow, or sell are made at the customer’s sole discretion.