3 Biggest Mistakes Gold Buyers Make
As a former Gold Broker - I talked to thousands of would be gold and silver buyers. It never ceased to amaze me that even those who had already purchased a fair amount of gold or silver continued to make some of the same mistakes many new gold buyers make.
For some, there was a certain element of luck that may end up protecting them from severe harm, but if they too do not learn to do a better job, it is only a matter of time before it catches up with them and they get burned.For others, the gold and silver they were sold at the prices they paid will likely never be recovered.
They are permanently underwater...losses guaranteed.Like many decisions, there are a couple of things that influence these decisions that a buyer has control over. One is how much they know about what they are buying. The products - coins, bars, numismatics, bullion, etc...
The market it is in - commodities and financial-investments and the delivery vehicles or how they participate in the market - brokers, dealers, internet etc...The second are is motivation or emotion. It is common knowledge within the industry that most gold and silver and other precious metals investors are operating from the emotions of fear and/or greed. With fear, folks are looking mainly for protection, with greed; they are expecting to make a bunch of money. Usually precious metals buyers fall into one of these two camps, but can share from both of course.
Even those who want protection against a total currency collapse hope to make money with their gold, silver or other precious metals.The problems begin here...too little knowledge with too much emotion. So, the three biggest mistakes gold buyers make:1.
Make a decision to buy gold or silver without taking the time to learn the products, the markets, and the sales processes....too little information. Until recently, finding the right information was almost impossible. Most of the information being offered to help educate buyers is being offered by companies that sell gold, silver and other precious metals. They will not teach what will make better buyers when it includes things like how products are priced, how to negotiate with a broker,
how to determine a fair price, what are the right products for you and your specific situation. Everything they write is pointed toward selling you something and every dealer has preferences....bullion, numismatics, gold, and platinum...whatever. And they don't want to anger others in the industry so they would never go to great lengths to show you why certain products are almost always a bad idea.
I truly believe I have alleviated this problem to a large degree.2. Procrastination and "herd" mentality. Over the last week, the price of gold has fallen almost 10%. This is a perfect time to be working real hard on #1. Our best estimates are that less than 3% of the population owns gold. Yet over the last year, the subject has garnered more attention than it did for the previous 30 years. The problem is it is outside most people's experience so they listen and think they need to figure this out sometime soon. But they will not.
They pick up a snippet here, or a snippet there, and instead of zeroing in for some time and get educated and take some action over a calculated deliberate effort...they will wait until it is frenzy buying and all the reasons I have been writing about for years as to why they should be owning some gold come true and like lemmings - pile into it at the very top of the market...or even on the downside.
3. Emotions are a key player in all financial decisions to some degree but they rank exceedingly high in the gold and silver markets. Come on, gold is gold. For over 5000 years it has always been associated with wealth and status. Gold brokers are professional emotion managers. And although they understand and use greed to sell a lot of gold, fear is the more dangerous of the two - at least when it comes to you and the rest of the 97% who own no gold. I study the markets for a living and I cannot overstate how serious global economics are today. We have never been where we find ourselves right now. There is more ammunition for economic fear based decisions than has existed at least since the 1930's if not ever and the good gold brokers are having a field day. Much of the information they will use the typical person does not know or understand and much of it is true. They represent the reasons you should be learning all you can about precious metals right now and preparing a personal plan. But most of you won't. You will wait until fear reaches its peak then jump in and buy whatever a good gold broker sells you. And many of you will never ever break even.
