Gold Investments

A Morning Show viewer recently asked "how easy is it to convert gold into cash?" Busey Banks Susan Abbott tells us this morning that all that glitters may not be gold. Q: What are some of the challenges of investing in gold? Can be owned in different forms Some are riskier than others Liquidity varies, as do the costs with each form Q: How about gold coins and bullion? Unlike liquid gold, coins and bullion can be stored in your safe deposit box or in "safekeeping" If youre considering this investment, be prepared to do a lot of research and investigation before buying. Grade and value are important. Gold coins and bullion can be purchased through dealers, and sometimes ordered through your bank. The US Mints website (www.usmint.gov) has links to reputable dealers. Youll pay a commission or premium, and many dealers have purchase minimums. When youre ready to convert your stash into cash, youll need to go back to the dealer. Be sure to find out what the policies and procedures are for cashing in. Q: Are there other ways to own gold? There are investments called "exchange-traded" funds, where you buy shares of an investment in gold bullion. Basically you get to own gold without the hassle of storing, insuring or without the worries about authenticity and purity. You can also buy gold stocks, where you are basically investing in a mining company, and indirectly youre buying a stake in their gold reserves and business. There are also many mutual funds that give investors a stake in gold. Youll have fees associated with all three of these investments as well, plus fees to your broker. Gold jewelry is something you might buy, but not usually recommended for investment purposes. Youll pay a premium because of the design and craftsmanship, and the purity and quality is not likely investment grade. Q: How do we answer our viewers question - is it easy to convert gold into cash? In two words, not really. If you own coins or bullion, your conversion options are through a private sale or a dealer. While your bank may be able to order gold coins for you, they most likely will not buy them back or sell them for you. Converting your exchange-traded funds, gold stocks or precious metals mutual fund into cash is the same as converting your other types of investments into cash. Youll have to sell your shares or stock, and will pay fees for the transaction.