1. Gold As An Investment vehIcle? here’s how to Buy It
More people are thinking about gold as an investment. With
banks in distress, bonds paying zilch, and “easy money” the
operating principle for currency managers around the world, it
makes sense.
Unless you want to trade actively, I suggest owning physical gold
bullion. This is a lot easier than it may appear, and the costs are
nearly as low as various “virtual gold” alternatives like ETFs.
For basic bullion products (as opposed to collectible coins), I
suggest a well-established dealer that does large amounts of
business at low prices. For small size, I suggest The Tulving
Company, which, despite its barebones website, does a lot of
volume. Tulving lists both bid and ask prices for common bullion
products. At this time, they offer to sell 1 oz. Krugerrand coins for
$27.95 over spot, and they offer to buy at $6 over spot, for a
spread of about $22. With gold around $1600/oz. recently, that’s a
spread of 1.4%, which is not too shabby at all. Plus, they offer
free shipping.
The most popular and liquid 1 oz. coins are the Krugerrands,
Canadian Maples, and U.S. Eagles. Apmex also offers a wide
selection of bullion products at reasonable prices.
If you want to go larger, the next common stage is the one-
kilogram bar, or kilobar. This is about 32 troy ounces, and they
are popular in Europe. The 100 oz. bar is the standard delivery
size for the Comex futures contract. However, for large size, the
most common format is the 400 oz. ingot, which is about the size
of a construction brick and weighs about 28 lbs. This is what you
usually see in the pictures of “a vault full of gold.”
Dealers like Apmex sometimes carry these larger sizes, but for
large volume, an institutional dealer like Scotia Mocatta is a good

2. source. Scotia is a division of the Bank of Nova Scotia, and is one
of the largest bullion dealers in North America.
The most common forms of silver bullion are 100 oz. bars, 1000
oz. bars, and bags of pre-1965 U.S. dimes and quarters, which
are 90% silver. A dollar of face value (for example, four quarters
or ten dimes) contains about 0.72 of a troy ounce of silver.
For storage, I would not recommend using any storage facility
affiliated with a bank or other financial institution. There are too
many horror stories. Also, don’t ask your dealer to store it (any
good dealer will refuse). I would look for an independent
depository. If you are in the Northeast, you might try First State
Depository Company, which is located in Wilmington, Delaware.
They will allow you to audit (visit) your holdings on 24 hours’
notice. Any good depository should do so. Like any good
depository, their holdings are insured. If Delaware is too far away,
you might have a similar alternative in your region.
Storing some bullion at home is not a bad way to go, as long as
you can maintain secrecy. Even today, people are finding hoards
of gold coins stored by Roman families nearly two millennia ago.
As for transport, it is easier than you think. Your dealer and your
depository are experts in this, so you just have to do what they
say. Probably, they will just send the bullion via Fedex – insured,
of course, probably under the dealer or depository’s umbrella
policy. For larger amounts, they may be able to offer armored
vehicle service.
Some hybrid options are also available, which allow something
like direct physical ownership of bullion with much of the
convenience of an online brokerage account. These are
GoldMoney and BullionVault. For large accounts, BullionVault
has some whole-bar services which might be a good alternative to
setting up an independent vaulting arrangement. Although these

3. solutions can’t, in my opinion, be considered as safe as bullion
directly held, nevertheless they offer much more independence
from the financial system than various ETFs and closed-end
funds available through your brokerage account. Also, costs are
lower than for owning physical metal directly.
People have been trained to be comfortable with only the most
abstract kids of assets. The typical broker margin account really
just makes you the beneficiary of some stocks via a broker, which
can go bankrupt (MF Global? Bear Stearns? Lehman Brothers?).
The broker, in turn, is a beneficiary in the Depository Trust and
Clearing Corporation, whose subsidiary, Cede & Co., actually
owns almost all the publicly traded equities in the United States.
Even if you could establish ownership of an ETF, what do you
own? It is an equity holding in a trust, which, by way of convoluted
legalese, obligates the trust to … do nothing for anyone at any
time.
For some reason, people are more comfortable with this than a
gold coin in their hand. However, there is a remedy to this
disease: buy some coins, even if it is only one or two. Take
delivery yourself, hold them, and hide them. You will understand
just how abstract and tenuous most investments are, which is
particularly relevant today when banks and governments are one
the verge of failure across Europe, and perhaps, in the U.S. too
before long.
Article Source: http://www.stockgoldmarket.com/gold-as-an-investment-vehicle-heres-how-to-buy-it