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| Gold and Silver |
Common Mistake # 1 - unrealistic expectations
One of the biggest obstacles facing investors in precious metals of all levels of experience impatience and temptation to chase prices in the hope of "big hit." Many new investors believe that metal prices can only go up and the investment success is a fact in the short term.
The key to success is understanding that investing in gold or silver is a long-term proposition. You can measure your success for many years, not weeks or months. If you are looking to "get rich quick", we recommend you not to engage in precious metals with this expectation.
Take time to assess:
What are your investment goals?
Why do you think gold and silver?
Factors to consider moving precious metals moving in the near future?
Chances are you are considering precious metals due to a variety of global economic conditions - most of which will not change quickly, if at all. This position and strengthen a long-term mindset when it comes to investing in metals. If you get in the game, they do for the long term.
Consider the other side too. Investors often rush vehicle investment vehicle if its investment strategy does not produce immediate results. We see many of our customers sell their metals to go invest in the "next big thing" certainly fail metals are then redeemed at much higher prices.
Common Mistake # 2 - Chasing the price
Some people spend years chasing the next big thing, often the conviction that this strategy is "the one". When this particular strategy does not produce the results they want, the common investor response is to blame for the strategy and quickly adopt another. They do not realize that the problem lies mostly in their own and not with a particular strategy or tactics.
Again, step back ...
Give the strategy some time. We can not stress enough that precious metals investments should be long-term holdings. Success in this game is not something that can be accurately measured in weeks or months. It is a long term commitment. Budget your time, energy and capital wisely.
Common Error # 3 - ETF and physical metals are the same
Many investors, especially those who are new to precious metals make the critical mistake of thinking that owning an exchange traded fund (ETF) that invests in gold, as GLD, is the same as owning physical gold itself. It is essential to understand the fundamental differences between owning shares of an ETF and owning physical gold or silver.
For thousands of years, physical gold and silver have been produced very desirable and are easily recognized who bought, sold and exchanged against goods in local and global markets. You can take physical gold in New York in Zimbabwe and everyone immediately recognize the inherent value of the metal itself. In essence, you can use cash or physical gold instead of, or to exchange cash over the world.
As the owner of a gold ETF, which will eventually own a piece of paper, a note of how many shares of the Fund is the owner; But you do not have the actual physical gold. Gold ETF is the owner and has a promise of fund managers to pay the value of the shares purchased in the ETF. The certificate ETF you have is something that is not traded on global markets universally, and is widely accepted or easily exchanged against the currencies. You would have a very hard time trying to negotiate paper certificates for products or services in the same way you would for physical gold.
Look more closely one of the most popular gold investment, GLD. The main drawback of the gold leaf is the lack of ease of converting physical gold. While investors may have a claim on physical gold, in many cases, is actually put their hands on the metal is much more difficult than expected.
Investors may not realize that when they invest in GLD, not physical gold. Yes, in theory GLD is backed by physical gold ETF, GLD and action is assumed to be equivalent to 1/10 of an ounce of gold. But the real story is much more complicated, with significant restrictions on redemption.
First, to be eligible to redeem physical gold GLD shares, a special permission Trust GLD is required. This authorization is generally reserved for brokers and major institutional players. Second, the shares may not be traded in lots of 100 000, equivalent to about $ 13 million at current prices. Third, according to the GLD prospectus, the fund reserves the right to rule on the gold requests in cash rather than in the physical metal. So even if you owned 100,000 shares and had permission to buy them, you still can not receive your physical gold.
Another nuance to invest in GLD is how to price movements relative to the spot price of gold on the futures market. While the initial price of GLD was established to represent the price of 1/10 ounce of gold, this relationship has not kept because GLD is subject to their own market forces and reducing the average value of the management fees. Without going into too much detail, the price of GLD is highly correlated with fluctuations in the spot price of gold, but not exactly follow the movements. For example, a purchase or sale of shares of GLD can drive the price up or down, without the spot price of gold.
Finally, if you read the language of an ETF prospectus carefully you will see that their investment in the ETF could drop to $ 0 in value. This highlights two key factors to consider about ETFs: Someone 1) you rely on others established the value of the gold held by the ETF, and 2) that is based on the fund managers effectively enough physical gold to cover its investment and all other actions too invested.
These two concerns are canceled if one considers that the own physical gold. First, the value of your investment is determined by the market, not by a fund manager or the popularity of shares of a given ETF. Second, since gold physically, you know exactly what it is worth at any point in time and does not depend on another person or entity to tell you what you have.
The possibility of becoming the value of physical gold is virtually impossible, since gold and silver have always been, and must always have a value. While the value of gold can fluctuate depending on a particular currency or for a given day, there will be some value associated with these precious metals due to the fact that precious metals are rare elements, can not be "facts" and a myriad industrial uses.
Common Mistake # 4 - Confiscation Scare Tactics drop
Countless investors have been presented to the "myth confiscation 'and unintentionally being found in expensive upsold needless numismatic coins. Many unscrupulous companies precious metals investors to buy numismatic coins, with a margin of 28-70% higher than standard rooms and bait ingots.
Parts used to promote high-priced technique is to raise the issue of confiscation. Many telemarketers tell investors that old gold coins in the United States are not "subject to confiscation," leaving the impression that modern pieces of gold bars are. Therefore, many investors buy rare old gold and significantly higher than the value of their price of gold content. The idea of buying "no confiscatable" golden sounds like a strong argument, but when scrutinized not resist the test of truth.
Many companies argue that the precious metal gold old sets of evidence from the United States and commemorative gold coins are "collectibles" and not be subject to another or from memory. Some companies say premiums at least 15% automatically collectibles. Another notion holds that currency hundred years or more are antiques and are therefore not subject to confiscation.
The conclusion is that no law or federal law Treasury Department supports these claims. ONLY if you are a collector or speculator must buy numismatic coins.
Common Mistake # 5 - Minimal Search
When faced with something new, it is easy to simply follow the advice of some friends or scan a couple of websites before making the jump. On the precious metals market is that the search for general information surface, the spot price and trying to "choose a price level" or by choosing to buy the most popular forms. It is important to learn information about buying gold and silver, and requires sifting through false information as well.
There are forums and blogs to check his zerohedge.com, seekingalpha.com, cointalk.com and goldismoney.com. They are great places for the reviews of other investors, strategies and experiences they have had with specific distributors. Ask specific questions on forums and to exploit the resources and expertise of experienced investors.
You can also turn to Facebook and LinkedIn to various groups of investors and stakeholders. Please note that most of these groups are made by dealers or individuals who have a turnover of the order of the day hidden. Consider the profile and background before considering any aspect of offered investment advice.
There are a number of blogs respected company in the industry that are hosted by distributors and wholesalers are another source of solid information or for a new investor. Many blogs in the industry provide information on new products, new mint and updated information on the market.
The traditional media often offer time, however, the news sometimes biased. Use your judgment when considering precious metals news from The Wall Street Journal, TheStreet.com, YahooFinance or Reuters. Check all new to read several reliable sources.
Finally, after your initial search and find a dealer who is willing to spend time to answer each of your questions without trying to sell you something.
Common Error # 6 - Going "All In"
Many investors in precious metals for the first time make the mistake to invest all or a significant portion of their savings in precious metals. What is wrong! Never invest all or a significant portion of its assets in a single investment vehicle. To determine how much to invest, you must first determine how much you can really afford to invest and what your financial goals are.
To determine how much to invest in precious metals should start following some longstanding investment principles. If you have a large debt, you must first work to pay your debt and provide three to six months of expenses in savings. If these principles are met then, take a look to see how much additional savings you have on hand to invest.
Follow this with a plan to add to your investments over time. You should plan to use a specific portion of their earnings to build its portfolio of precious metals at the time. This method is called "dollar-cost average" and is useful if the purchase of stocks, bonds, mutual funds, precious metals or any investment. Talk to a qualified technician to set a budget and determine how much your future income you should invest financial advisor.
For many types of investments, minimal initial investment may be needed. Various precious metals traders require different minimum purchases. Your local dealer can stop only buy one or two ounces of silver, while some online merchants require more than $ 5,000 to buy them. We, for example, does not have a minimum purchase requirement.
Finally, do not borrow money to invest, do not purchase precious metals on leverage and not use the money for other needs.
Common Error # 7 - Obsession
Did you know that a Google search of the word "Gold" has produced over 700,000,000 results? "Silver" brings back some 480 million results. This is a serious information overload and too much for one person to try to follow.
Many newcomers to the precious metals investment may find that they feel overwhelmed with information, especially when the results of the gold rush, or when the price reaches a new record. There is much to learn and things that are happening simultaneously around the world for many, it is easy to catch the fever and want to keep constant watch on the market. This gives new investors a bad sense of control, think that if they keep an eye on the market, they will be on top of things. Right? In fact, the opposite is happening.
The sun is always shining somewhere on Earth, and there is a market somewhere that is almost always open - which is particularly evident with Internet connected current and global economies markets. Markets are constantly changing as events around the world - it is simply impossible for a person to follow him 24/7 precious metals market.
The solution?
Relax. Do not become obsessed with the changing world of precious metals - give your mind a break from everything. When our brains are strained, we tend to take high-risk decisions with a lack of concern for the consequences. You will still be there when you return. If you've done your homework, work with a reputable company to place orders and have a solid long-term strategy in place, you hardly miss a beat.
| Gold and Silver |
One way to ensure that you are utilizing a great strategy is to pre-plan your trips - be less reactive and more proactive. This gives you a real sense of control and allows you to calculate your strategy and expect the best. The markets move as they will if instead of reacting to everything, which requires watching the Hong Kong market to guess what will happen in London, foreground of your movements can be Conclusion
Investing in precious metals is a serious matter, but it can be very rewarding. This kind of effort requires both attention and respect. Master and a world of financial opportunity is open to you. Being a victim of and there are few things more frustrating. Hopefully after this brief report you have gained a better understanding of the rapidly changing nature and depth of precious metals and how to maximize your chances of success.
The traps have shown here are some of the most common new investors to experience errors. You can avoid the headaches of these errors by taking into account some of the crucial information we have highlighted in this report. Above all, remember that success is measured in years, not weeks. Avoid get-rich-quick mentality - keep your long-term goals and expectations.
Also, remember that there is no substitute for knowledge and practice. Educate yourself. Find a system that makes sense to you. No forward with something just because you've been told it works. Instead, determine what resonates with their own body of knowledge and experience, and then stick with your strategy.
Finally, find a mentor - someone who is willing to impart knowledge that has made them successful. A solid investment precious metals understanding is really valuable, offering you the opportunity to secure investments, financial strength and independence.
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