Don't Buy Out Of Fear!

by Ricardo W. Precious Metals Dealer & Networker

A lot of people are getting into precious metals due to what they see & hear about the economy. Fear has now entered their hearts and they see/hear infomercials to purchase silver and gold. But because they have no knowledge of silver & gold, they decide to go to a dealer for help. This is were the danger comes in because the dealer knows who is new to precious metals and will try to sell them expensive coins that they don't need to purchase at the time.

Before I say my piece, I want you to know that I like to collect coins and I sell them as well. My goal is to help educate people on the purpose of these coins and I hope as you read this, you will do the same for some one else. With said, here we go.

Some dealers are using the Executive Order "tactic" by Franklin Roosevelt, to sell expensive coins to newbies that has no clue about the precious metals market. This order prohibits the hoarding of any gold except in the form of collectible coins or jewelry. By doing this, they get the buyers to stack up on collectible coins that they will not be confiscated, but the question is "How are they going to use them to barter or trade with?"

If a world wide economic collapse happen today, you will still need to purchase gas & food like you normally do. Let's say you have a collectible gold piece that is worth thousands of dollars and you want to trade it for the gas & food. Would the vendor really care about the rarity and the condition of the coin that you are offering him for food & gas? No. The vendor is only interested in the value of the metal-not the history of the coin.

Collectible & bullion coins have their respective places where they flourish and do the job that is required of them. Silver & gold bullion are used in most portfolios to strengthen and protects "paper" assets just in case of fluctuations in the market. Investors also know that if something did happen in the economy, they can always use silver & gold bullion to buy the items they need.

So if you are looking for precious metals that can be used to trade or barter with, then you need to look into bullion. As for the amount you need or how much to purchase, do extensive research and/or speak to a financial adviser who is "knowledgeable in precious metals.

Coin collecting is in many ways an art to master but once you do, it becomes fun and may be profitable for the owner. Here are four factors that can influence the value of a collectible coin: rarity, condition, bullion, and the demand.

Rarity is how many coins are minted. This has little to do with the age of the coin but how many coins are available in the market place. The rarer the coin higher the value.
Condition deals with the grade of a coin. An excellent or fair grade will influence the value of the coin. The better condition of the coin is in, the more it will be worth.
Bullion value of the coin is determined by the value of precious metals it contains. Silver, gold, or platinum will not normally sell below their melt value.
Demand is how popular the coin is. Is the coin in high demand in the collectible market? How many collectors want a particular coin will & how much they are willing to pay, can also influence the value of the coin. There are some coins that are plentiful in the market but are more popular with collectors which may command higher prices.

Like I said earlier, collectible coins has its own place, the collectible market. These coins are what collectors around the world are looking for and understand the intrinsic value, rarity, history, and grading of the coins almost perfectly. They know exactly what they are buying, why they are buying it, and also see the potential money that can be made if they hold on to it.

DO NOT buy bullion just because someone is pressuring you to buy “bullion only"! This same rule applies to collectible coins as well! Knowing the value of a product is essential before you buy and it just makes sense. Do your homework and know your true purpose for buying collectible coin.