How to Invest With Gold

signpost that says gold price

Mention gold to people and some go nuts. There are a collection of crazies that think it's the best thing to buy because armaggedon is just around the corner. You won't convince them otherwise so they load up on canned food, toilet paper and gold coins. They live in a frightened state and are most likely a doomsday prepper to boot.

What is the best gold coin to buy for investment just in case our lives are in jeopardy and we crave an alternative investment? There could be a meltdown south of the border because of all the fear running rampant. That's the thing about the future, nobody knows what's going to happen next. Do I need this type of insurance? Isn't that what gold is? Insurance against some world wide catastrophe.

Gold climbs a wall of worry during volatile times like we're in right now. It has spiked to over $1200 at the moment of writing as the new president has targeted a lower dollar. This is exciting news for gold bugs as the economy is teetering on the edge. I'm going to be buying a little gold and raising some cash for these just in case scenarios.

Buy Quality

I don't own any gold coins at the moment but in the past I've owned Canadian Maples because I live in Canada. If I lived in the US I would buy American Eagles. If I lived in Europe I would probably buy British Gold Sovereigns.

In case of a meltdown or an even worse catastrophe like a world wide meltdown of financial markets like we saw in 2008/9 you want to hold currency from your own country. Gold coins can be exchanged for local currency so that you can buy products and services you can use. I view gold coins as useless other than to show your grandchildren how bright and shiny they are. You are going to be a prime target for theft and besides that storing these suckers is going to be disastrous in a panic.

Home Country Bias

This is where you have to be a patriot and buy in your own country. That is the best investment in gold coins you could make. I'm not concerned about purity or beauty or collectability here. Forget that. Don't buy gold coins because they look amazing and they make you happy when you look at them. You buy them as insurance or in some cases to pass on to your heirs. Singer Prince just died and it was discovered he had $700,000 worth of gold coins. He believed in them or most likely he didn't believe in the US dollar. Whatever your reasons don't go crazy spending money on them because you got a tip about all the spectacular gains people are making. Ignore that crap and buy because you want to be insured against a jaw-dropping collapse.

I have been hearing about a bloodbath in financial markets since I started investing on my own 35 years ago. There is nothing wrong with being cautious but there is no invasion from foreign forces to fear. Owning a few gold coins as a 5-10% weighting would be prudent and not that frightening a proposal for most people. Here are some good choices in that regard:

Canadian Maples

maple leaf gold coin

American Eagles

american eagle gold coin

British Sovereigns

british sovereign gold coin

Rest of the World

Yes there are Mexican Libertads and Chinese Pandas you can buy/hold and own, I get that. I just don't want to own them as a Canadian. In case of a hurricane and I need money they are going to be hard to sell. When your drowning in debt because of loss and you need money, don't be fooled and just buy anything gold. It does matter, don't be gullible. Go out and protect yourself and never sell in a panic.  I can remember as a teenager all the talk was about 'Kruggerands'. Now that I'm older and thanks to the internet, I know why. South Africa was the only country making them at the time. You had no choice if you wanted to invest in coins. Nowadays their purity is much lower than Maples or Eagles and people have much better choices. Besides that, where would you go to sell a Kruggerand if you needed cash?

Gold Stocks/ETFs

You buy gold stocks because you think you're smarter than everyone else, you buy ETFs because you know you're not smarter than everyone else in the market. You buy a basket of gold stocks which limits your risk. No sense gambling here, you want to be protected from a possible nightmare scenario so there is no need to try and figure out what is the next big bargain in gold stocks. Just buy the whole market. I never hold more than 10% of my portfolio in gold. More than that is just foolish.

Closing Thoughts

Like all things in life I like balance. When you are confronted with those 'what to buy' decisions, always go with balance. You can buy a few gold coins and also invest in the whole gold equity market through ETFs. This is the safe play. Anything else is just pure speculation and not investing. This is what I have done throughout my investing life and continue to do so in retirement. I believe this will provide you with a cushion and also protect your money from a meltdown. Gold can be a very volatile investment. It will prevent you from slaughter if financial markets head into a tailspin like they did during the last financial crisis. Those that owned a little gold were not as exposed to collapse as some. 

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The New Case For Gold

Do you own any gold coins or gold investments? Which ones would you buy? I would love to hear from you in the comments below.

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6 thoughts on “How to Invest With Gold

  1. Peter. Very balanced discussion. I know Diddly Squat about financial markets, and yes I have heard about buying gold and silver coins.
    As you say it’s a balance between too much of one, and not enough. Getting that balance right is difficult.
    And God only knows what the next 4 years brings for this planet.

    • Yes nothing like being protected in times of uncertainty, like we find ourselves in right now. Cash and gold make a lot of sense as of right now. All the best my friend:)

  2. Hi there, investing in gold is something that may make you rich if you do things right, I was wondering how to invest in gold, found your post.

    Everyone should be careful and play it safe like you stated on your post.

    Thanks for sharing and have a great day!

  3. I’ve always been interested in investing money, just was never sure on how. Or what? I’m going to take some of your tips under advisement. Thanks for the help and motivation. 🙂

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