SouthernLiberty asked:
Since purchasing these 20 franc pieces (not for numismatic investments), the price of gold has risen almost 50%……I must add that with my decision to purchase these francs…I have’nt lost a dollar, unlike paper stocks or Mutual Funds. And I’ve purchased these coins for a very small premium over there melt value ( approximately 5-8%)…..But the sun does’nt always shine….I have’nt always made the best decisions when it comes to investing….so I ask for opinions and help….question is….should I continue to purchase these gold francs….the economy points to YES. I do know this, if I had placed the 75,000 I lost back on 911. I’d be very happy man today….I need advice…please help. By the way the US government cannot confiscate what is not there, because they are minted in France. Dose’nt have USA struck on them. And they are very lucrative. Unlike the US pre-1933 gold coins which in some cases are able to be confiscated. WHY! because they were struck by the US goverment.
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{ 2 comments }
Not sure if you are asking whether to buy gold or to buy that particular kind of gold. If you are going to buy gold then I’d recommend not buying coins. You pay a premium above the cost of the gold for the coin and can a better deal. Also I assume you are paying for shipping and either storage or insurance. I’d recommend buying it directly through an ETF. You have a management fee but it will be lower than the costs above.
As to whether you should be buying gold at all…depends. I’ve heard a lot of strong arguments for “Yes” and the only good arguments I’ve heard for “No” are:
1) It doesn’t pay a dividend or genernate earnings (assuming you are not buying gold mining stocks) so for it to be a good investment you must be betting on inflation or a fall in the dollar.
2) It has already doubled in value over the past few years.
I personally think it is a great investment but then I’m a dollar bear. If this is your only major investment (and no a house does not count as an investment if you live in it) then I’d say you are better off with international stocks. If you already are diversified then sure buy gold but I’d stay away from the coins unless you get a great deal or have enough to keep your costs down.
You are doing very well, gold will keep rising while real interest rates are kept negative (central bank rates shor term rates below inflation rate).
You should keep buying physical gold. An ETF is a promise on storage, in a financial crisis you might have problems operating and with liquidity. You will not have these problems with physical gold. Gold is money and you can exychange it anytime, anywhere for other goods.
You migth consider buying glod coins with a smaller premium like the 1 ounce Krugerrand from SouthAfrica or the 1 ounce Mappe from canada. The spread bewteen buy and sell is just 1%.