Inflexibility When Investing In Gold
Many investors are inflexible when buying or selling. It costs them money which they could save or make if they listened to good advice.
Writing this page on 16th September 2008, we are in a situation where Krugerrands, and to a lesser extent, other one ounce gold coins, are in short supply and selling for abnormally high premiums. At a time like this it is better to avoid buying Krugerrands, maples, and eagles, and buy gold sovereigns instead.
For investors in France, we would extend this to include French 20 francs; for Swiss investors, Swiss 20 francs (vreneli), and investors in other countries including Belgium, Netherlands, Germany, Peru, Mexico, Austria, their own national "brand" of traditional gold bullion coin would be a good switch.
For all investors, any other one ounce coins, including the excellent Australian nuggets and lunars produced by the Perth Mint, Austrian Philharmonicas, or Chinese Pandas would also be good, but only if bought at sensible and competitive premiums.
When taking advice, it is important to consider its source, quality, and context. Some dealers give advice which suits their own books. Advice from financial media may be reliant on rehashed advice gleaned from dealers, which may be out of date or biased. When assessing the quality and relevance of advice, it is worth looking at whether any arguments are stated supporting the advice, and if so, whether they appear logical. Remember that the simplest advice might not be the best. We give a few simple explanatory examples:-
- "One ounce Krugerrands are the best way to invest in physical gold".
Not bad advice in general, but is should add subject to a competitive premium, but gold sovereigns are often a better buy. Also is other one ounce coins are available at similar premiums, they may be a better buy than Krugerrands.
Sometime fractional Krugerrands or other bullion coins can be bought for similar premiums, in which case, buy them instead.
- Dinosaurs almost certainly became extinct because of an inherent inflexibility.
Commodity versus Brand - The Choice
If you consider the definitions of commodity and branded product, you will surly conclude that they two are opposites. Paying a premium price for a brand when investing in a commodity is a contradiction in terms, and is illogical, but then...
"Only two things are infinite, the universe and human stupidity, and I'm not sure about the former".
... Albert Einstein.
It's worth looking at our corollary page to this one.
It's also worth looking at our August slowdown page.
You may wish to look at our gold investment advice page.
Please be aware that for callers to our showroom hoping to buy Investment Gold we must see two forms of identification. Please see our identification page for further details.
There are now live spot gold prices available on this website, please see our gold prices page.
Gold - Your Flexible Friend