3 advantages gold bars and coins have over other gold investment types
If you've considered investing in gold, you may have come across several options. One is to buy physical gold coins and bars. But, you can also buy gold collectibles, ETFs, mutual funds and other gold derivatives.
With so many options to choose from, it's critical to know your options, especially if you're a beginner investor. After all, each type of gold investment comes with its own advantages and disadvantages. But, there's one type of gold that you may want to consider over the other. That's gold bars and coins.
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3 advantages gold bars and coins have over other gold investment types
Gold bars and coins are attractive commodities. But, there's much more to investing in these types of the yellow metal than you may think. Here are three advantages these investments offer that you won't find with other gold investing opportunities:
Gold bars and coins are tangible
Gold bars and coins are tangible, physical assets. That means you're able to hold them in your hands, see them in real life and, in many cases, inspect them before you purchase them.
In a world where derivative investments like ETFs and mutual funds are commonplace, physical assets like gold coins and bars can be highly valuable. After all, if you purchase a gold ETF, you're trusting that the people behind the ETF are buying a quality of gold that's suitable for you and the quantity of gold they say they are.
But, when you buy physical gold coins and bars, you can be sure that you're getting the quality and quantity you pay for.
Tangible assets may be easier to place value on than derivatives, too. "There isn't any 'speculative' value premium," says Matt Willer, managing director of capital markets at Phoenix Capital Markets, a financial planning company. "So, it's easier to value."
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Gold bars and coins are easy to buy
If you want to buy gold stocks, ETFs or mutual funds, you'll need to either open a brokerage account or purchase your shares of funds directly from the fund itself. That can be tricky, especially for those investors unfamiliar with gold.
But, buying physical gold bars and coins is a relatively simple process. That's especially true given the fact that you can purchase these products from big box stores like Walmart and Costco. And, if you're not interested in taking the big box store approach, there are multiple online gold dealers to choose from.
Gold bars and coins are highly liquid
Liquidity should be considered any time you make an investment. This refers to your ability to convert an investment asset into cash (typically through the sale of that asset) when you need to. Highly liquid assets, like gold coins and bars, are easy to convert into cash while assets with low liquidity may be difficult to sell.
"If you take physical possession, there are no fees, and it's readily liquid unlike other gold objects/investments which may require a collector or appraisal," says willer.
Not only can you sell gold coins and bars to other consumers through means like Facebook Marketplace and Craigslist, you can also sell them to dealers, pawn shops and more. You could even type "sell my gold" into your favorite search engine and find a wide variety of online dealers who are willing to buy gold on demand.
The bottom line
If you're thinking about investing in gold, you should strongly consider purchasing physical gold coins and bars. Not only are gold coins and bars tangible assets, they're also easy to buy and sell, making them a better option than other gold types for many. That's especially true for beginner investors. So, start adding gold coins and bars to your portfolio now.
