Buying high premium numismatic proof/collectable coins: is not advisable due to following factors
a. High Cost: Premium numismatic coins can be very expensive due to their rarity, historical significance, and high quality. It also attracts GST component which increases the cost. b. Liquidity Concerns: Premium numismatic coins may be difficult to sell and can take a long time to find a buyer. This can result in a lack of liquidity and difficulties in converting the investment into cash, making them hard to sell quickly and at a fair price. c. Market Volatility: The value of premium numismatic coins can be highly volatile, with prices fluctuations being dramatically based on supply and demand. d. Storage: Premium numismatic coins must be stored securely and properly to maintain their value and condition, which can be costly and inconvenient. There can be times where you may find a few pieces that are exceptionally beautiful. It is advisable to buy them as a single piece for your display. Don’t buy multiples of them.
Buying graded coins: Graded coins, also known as third-party certified coins, have a few disadvantages, including:
a. Cost: The cost of grading a coin can be expensive and can add to the overall cost of the coin, making it much more expensive than ungraded coins. b. Opinions can vary: Grading is subjective, and opinions on a coin’s condition can vary between grading companies and even between individual graders. This can lead to disputes over the accuracy of a coin’s grade. c. Market Dependent: The value of a graded coin is heavily dependent on the current market conditions, meaning that its value can fluctuate based on supply and demand. d. Reliance on third-party: The authenticity and grade of a coin are determined by a third-party grading service, so the buyer must rely on their expertise and integrity. e. Limited market: The market for graded coins is relatively limited, with a smaller pool of buyers and sellers, making it difficult to sell the coin quickly. f. Reduced Flexibility: Graded coins may not be eligible for certain types of investment strategies, such as rolling over a retirement (SMSF) account, due to the restrictions that come with third-party grading.
Buying jewellery as investment:
a. Cost: jewellery can be more expensive than other bullion products such as coins or bars in cases by few times, due to the added cost of craftsmanship and design. b. Market Volatility: The value of jewellery can be affected by changes in the gold price, as well as changes in fashion and market trends. c. Liquidity Concerns: jewellery can be difficult to sell and can take a long time to find a buyer, especially if the piece is not in high demand. This can result in a lack of liquidity and difficulties in converting the investment into cash. d. Resale Value: The resale value of jewellery is not always guaranteed and may be lower than the original purchase price, especially if the piece is damaged or if fashion trends have changed. e. Maintenance: Jewellery requires proper maintenance, including cleaning and repairs, to maintain its value and appearance. These costs can add up over time and reduce the overall return on the investment. f. Valuation: The value of jewellery can be difficult to determine, as it is not traded on a central exchange like bullion products. This can make it difficult to accurately assess the value of the investment.
Buying junk/ Sterling silver:
a. Premiums: The premiums on junk silver and sterling silver can be higher than other bullion products, it also attracts GST reducing the overall return on the investment. b. Liquidity Concerns: Junk silver and sterling silver can be difficult to sell and may take a long time to find a buyer, especially if the market for these products is not strong. This can result in a lack of liquidity and difficulties in converting the investment into cash. c. Market Volatility: The value of junk silver and sterling silver can be affected by changes in the silver price, as well as changes in market trends and demand. d. Liquidity Risk: Junk silver and sterling silver may not be as widely recognized or widely traded as other bullion products, making it difficult to quickly convert the investment into cash in times of need. e. Counterfeit Risks: Junk silver and sterling silver are vulnerable to counterfeiting, so it is important to purchase these products from a reputable dealer to ensure authenticity. f. Storage: Junk silver and sterling silver must be stored securely to maintain their value and protect them from theft or damage. This can be costly and inconvenient, especially if large quantities are being stored.
Buying from non-trusted source:
We may find great offers on social media platforms (Facebook/Gumtree/Instagram). Go ahead with due diligence, ask for references/feedbacks in groups/forums, do face to face transactions at secure place like police stations/bank premises, test the product before you buy (use Sigma/XRF). There are following risks associated with buying from non-trusted sources. a. Scams: Non-trusted sources may be involved in scams that target bullion investors, such as selling overpriced or counterfeit products, or using aggressive sales tactics to pressure investors into making a purchase. b. Legal Concerns: Buying bullion from a non-trusted source can potentially result in legal issues, such as violation of anti-money laundering laws, or legal action resulting from the purchase of stolen or illegally obtained bullion. c. Overpriced Products: Non-trusted sources may sell bullion products at inflated prices, which can result in a lower return on investment. d. Quality Issues: Bullion products purchased from non-trusted sources may not meet industry standards for quality, weight, and purity, which can affect the product’s value and resale potential. e. Lack of Support: Non-trusted sources may not provide adequate customer support, making it difficult to address any issues that may arise with the product or the transaction.
Pay shipping for smaller orders:
Small order shipping can be more expensive on a per-unit basis, as the fixed costs of shipping, handling, and packaging are spread across a smaller number of items. Most dealers including us (https://australiabullioncompany.com/) give an option for free storage for a certain period and provide group shipping for your orders. You can save a lot of shipping cost by grouping smaller orders together. It’s a good idea to buy local, if possible, to save on postage. We hope this article serves its purpose of helping everyone who is planning to or has just entered the field of precious metal investments to gain more insight regarding metal investments and we hope it helps them avoid making the investment mistakes as mentioned in the article.