Thinking about investing in Costco gold? Expert says there are better options
BOSTON - Costco started selling 1-ounce bars of gold online last month and it's been a big hit.
If you're interested, it's going to cost you nearly $2,000, and although it's referred to as a bar, the one ounce, PAMP Suisse Lady Fortuna Veriscan that you're actually buying, would fit into your hand.
But more importantly, here's why James Royal, a senior analyst from Bankrate, says the gold bars from Costco are not the way to go.
"As soon as you purchase these gold ingots. You're already down 5, 6, 7, percent, which is the cost you pay over this the fair value, the spot price of gold. And then, if you have to go sell later on, then you're going to lose a similar percentage. And so that's a huge spread for anybody to get in-and-out of gold if you had to give up 15% of your investment at any one point, just to buy in-and-out. That's a huge cost right off the top for anybody," Royal told WBZ-TV.
You have to keep that gold safe, so you'll need to shell out more money to insure it.
"Anybody who comes into your home could physically take that from you. So that's another huge issue with owning gold, you really have to protect it," Royal said.
If you want to invest in gold, Royal suggests buying into a fund that owns physical gold instead. But, he said stocks are more likely to perform better over time, compared to gold.
"They need to really more carefully understand the long-term returns that you can get by investing in stocks. Stocks handily outperform basically all other asset classes over time and it's a really attractive way for you to invest in the things that have made other wealthy people wealthy," Royal told WBZ.