by Michael J. Kosares
Author, The ABCs of Gold Investing: How To Protect and Build Your Wealth With Gold, and founder of USAGOLD
It is surprising how many prospective investors simply dive into gold and silver investing without much in the way of a consumer inquiry. That lack of simple due diligence has ended up costing a good many investors thousands of dollars, and sometimes even hundreds of thousands, before the damage is detected. Below you will find some brief but valuable guidelines to help you choose the right gold and silver company. It might be the most important decision you will make on the road to becoming a gold and silver owner.
Choose a company that has a solid track record
Ten years in the business is good; fifteen years or more is even better. Avoid the newcomers, the flashy discounters and the complicated online coin shops. These outlets are designed more for collectors and dabblers – or buyers out to make a quick, online purchase – than serious investors looking to hedge their portfolios.
Choose a company with a solid track record and longevity. It is the mark of a well-run business committed to its clientele.
Choose a company with strong credentials and a reputable history
A simple background check can go a long way in helping you circumvent a company with a history of problems and poor customer service. A quick visit to the Better Business Bureau's online website can do wonders and save you a major headache down the road.
The BBB provides consumers with a company's basic rating, verified online reviews and a list of complaints. (If a company does not have a BBB rating, treat it as a red flag.) Pay special attention to the complaints and how they were handled even if the company has managed to maintain a high rating.
A good many precious metals' businesses that have gone bankrupt, or found themselves in legal difficulties in recent years, showed signs of something being wrong long before-hand in their rating and complaint record. Oftentimes, the BBB will post a warning about such businesses.
BBB reviews are another good source of consumer information. Make sure that the reviews are verified and noted as such by the BBB itself. Too often businesses stack their review section with reviews that have not been vetted officially by the BBB.
Choose a company with strong BBB credentials. Now more than ever, reputation matters.
Choose a company willing to spend time with you and answer your questions
The company that is abrupt at the outset is the company likely to give you short shrift in the future when you have a question or concern that needs to be addressed. Be especially wary of companies that use aggressive sales tactics. Seek out and develop a relationship with a company that handles your inquiry in a friendly, professional manner.
Choose a company willing to work with you. It will provide helpful guidance now and peace of mind in the future.
Choose a company willing to accomodate your timing
Even if you think that you might want to make a purchase at some point in the future, but for whatever reason are not ready now, it would be best to vet candidates ahead of time. By doing the spadework, you will know where to call when the time comes. It is also advisable to do some advance planning with respect to the specific items you might want to add to your portfolio.
Choose a company willing to be patient with your timing needs. It will be there for you when you need it. Hurried decisions made in the heat of a media-driven gold and silver frenzy can lead to mistakes. (Of course, the ideal is to follow the old rule: The best time to buy gold and silver is when everything is quiet.)
Choose a client-oriented company geared to helping investors
Many online companies are happy to take your order (no matter what it is) and then It's good luck trying to make contact and get information when you need it – particularly when it comes time to sell or track a late delivery. Mostly interested in quick turnover, customer-oriented companies are order-takers rather than experienced, professional advisors. Client-oriented companies, and there are still a few around, tend to take more of an interest in developing a relationship that will serve both parties over the medium to long run.
Choose a company that takes an interest in you as a long-term client rather than a one-time customer. There is a great deal of difference between the two particularly if your goal is to become a successful gold and silver owner.
Choose a company that will not divert you from your objectives
Most investors come into the gold and silver market looking for a way to preserve their assets from potential financial or economic threats. Not every gold company, however, has asset preservation as its top priority.
Some tout leveraged accounts or high-end numismatics, for example, or graded and over-priced contemporary bullion coins, off brand bullion bars and jewelry items (to name a few of the wrong turns often taken by first-time investors), none of which serve the safe-haven aspirations of most gold and silver owners.
Choose a company that thinks like you do. Keep it simple. Buy well-known and established physical coins and bullion with a broad international market. Stick with highly liquid items and take delivery. It will enhance your chances at success.
Choose a company whose website you have explored
Before you even contact a gold company, it would serve your best interest to determine the real nature of its business. You can learn much by browsing a website and determining whether or not the company might be a good fit.
Choose a company with a well-run, agreeable website but don't forget the rest of the due diligence outlined above.