Running Point and its chief investment officer, Michael Ashley Schulman, CFA, were quoted by CBS News in an article — by reporter Aly Yale, “Where to buy gold and silver” — regarding where, how, and why to buy gold and precious metals.
How to buy silver and gold?
For most people, silver and gold ETFs present an easy, low transaction cost, and low friction way to invest in precious metals using your brokerage account or with the help of a financial advisor. Purchasing physical silver or gold coins or bars is a very traditional way to invest and can be done through reputable dealers or jewelers (you want to ensure that the gold you purchase is real and true to its represented weight and purity), but transaction costs and theft risks are higher, storage and insurance costs can eat into long-term returns, and precious metal coins often sell at a premium to gold’s spot price. Silver and gold futures and stock in precious metal mining companies are volatile ways to gain exposure and your returns could greatly outperform or underperform the true price of the metal.
A personal decisions—ETFs, coins, or jewelry?
The best way to invest in precious metals is a very personal decision. Silver and gold ETFs are a convenient way for beginners to invest with low friction costs and without the need for physical storage or the complexities of futures trading. However, if one craves the Armageddon safety of silver or gold, owning it physically may be the preferred option. Unfortunately, although owning jewelry can seem like a fun way to invest, it is usually not an efficient method because jewelry often has a high design and retail markup on purchase that cannot be recouped when you want to sell it. Additionally, silver and gold jewelry is usually pure enough to be on par with coins and bars.
What are some of the risks?
Many individuals fail to understand the risks of owning silver or gold. The risks include price fluctuations, insurance and storage costs for physical metal, geopolitical risks, and risks associated with specific investment vehicles like futures or mining stocks. Additionally, when transacting in physical precious metals, some of the largest risks come from dealing with unreputable dealers that may overcharge for their services. Regarding benefits, gold tends to be a very good investment portfolio diversifier but often its price over the short to medium-term may not move as you’d expect because of supply/demand economics and socioeconomic issues. Silver and other precious metals with strong industrial uses can be especially subject to economic and business cycles.
Quoted article excerpts are below:
If you want to buy physical gold and silver to keep in your home, in a safe or in a safety deposit box, there are many options you can explore.
“Purchasing physical silver or gold coins or bars is a very traditional way to invest and can be done through reputable dealers or jewelers,” says Michael Ashley Schulman, founding partner at Running Point Capital Advisors.
If you invest in gold or silver jewelry, there may be even more costs to consider.
“Although owning jewelry can seem like a fun way to invest, it’s usually not an efficient method because it often has a high design and retail markup that cannot be recouped when you want to sell it,” Schulman says.
Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Past performance is not indicative of future results. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-23-76