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Krugerrand gold coins represent one of the best, safest, and simplest, ways to invest in gold. Although gold is gaining in popularity and acknowledgment, a great number of people still know little about precious metals. So, it’s important first to make the case for precious metals in general and gold in particular. It’s worth addressing the naysayers as well. Having done so, we’ll take a closer look at the proper place of these handy coins in your financial arsenal.
Krugerrand Gold Coins And Why To Buy Them?
Believe it or not, some people are actually opposed to gold. In fact, some really wealthy people are opposed to gold. For instance, Warren Buffet is notoriously not a fan of the yellow metal. His objection, as he shared in Fortune magazine, is that gold doesn’t really do anything. His position is that it is not a wealth generator. In short, it seems he is claiming that gold lacks inherent value. This is similar to those who claim that gold markets are driven by fear, if not greed.
In some respects, Buffet makes some valid points. We would expect that from the most well-known, successful investor in the world. It’s absolutely true that most Krugerrand gold coins just hang out in a vault or home safe. Gold doesn’t even have the industrial utility that other precious metals, such as silver, can boast about.
Be that as it may, there’s no escaping the fact that gold has been in an undeniable bull market that appears far from over. In the first decade of this century, gold essentially finished each year higher than where it started. And the price has risen about five-fold from the lows.
Whether sitting in your safe or out on the counter-top for display, the bottom line is that gold has been a phenomenal investment. During this same time, the major stock indices have been nearly flat. Moreover, the fundamental reasons for gold’s performance have, if anything, intensified.
Krugerrand Gold Coins – 1 oz. Rounds Or Paper Gold?
Let’s take a closer look at the reasons to own gold in the context of answering other common questions. Some people know enough to know that precious metals in particular, and commodities and resources in general, are in secular bull markets. Without knowing much at all about how to buy and sell bullion, these folks can easily play the precious metals market. They may not even know where to find Krugerrand gold coins, but they can buy a gold ETF in their online brokerage account.
The problem with gold ETF funds is that they are a paper proxy for the real thing. It’s not really contemplated that you would ever take physical delivery of gold through an ETF. The minimum delivery quantity is prohibitive and it’s easier to just buy bullion somewhere else. Plus, if there is ever an issue with there being insufficient bullion in reserve to fortify the outstanding shares of the ETF, you’ve placed yourself at unnecessary risk.
Ironically, purchasing anything other than physical metal violates the very principle prompting the surge in gold’s value. Many people are seeking refuge in gold bullion as a real, hard asset. They want a valid store of value in a “currency” that is recognized worldwide. Right now, the Fed is so busy printing funny money that we are losing purchasing power, even as the price of the necessities of life goes up. Gold is not only a form of true wealth, a veritable standard of value, but also a hedge against inflation. And that’s on top of the fact that it’s also been a great investment for the last decade.
Krugerrand Gold Coins And How Much Gold Is Really Enough?
Opinions vary widely about what proportion of you financial assets should be in gold. Note that I refer to financial assets, because I don’t limit the discussion to your “portfolio.” In fact, one of the best places to own gold is outside of your portfolio. Indeed, holding cash, particularly U.S. Dollars, is a losing proposition. If nothing else, aside from the need for immediate liquidity, I would keep my “savings” in Krugerrand gold coins. Beyond that, expose yourself to gold to the extent you’re comfortable, leaving room to speculate for superior returns with mining stocks. It seems hard to beat gold. It was one-third of the gifts taken to Jesus. It’s been a symbol of wealth since the dawn of time.
Why Krugerrand Gold Coins?
Krugerrand gold coins are the most widely circulated gold bullion round in the world. The South African Krugerrand tends to carry less premium than the Canadian Maple Leaf or the American Gold Eagle. As a result, you can buy these coins cheaper, because you’re paying less above the then-current spot price of gold. The theory is that you will get less when you sell, so the discount on the front end may be moot. However, at present I’m most concerned with amassing as much metal as possible, not contemplating potential scenarios down the road. Having widely recognized one-ounce rounds familiar to people all over the world, such as Krugerrand gold coins, is appealing.
