Beyond having a small part of my portfolio in a precious metals mutual fund, I had never, until recently, thought about buying gold itself, as in a gold coin. But on September 3, 2010, the phone rang and I learned something.
The day before, I had the following investment question answered on the Lang & O'Leary Exchange (go to the last 3 minutes of the show): "How should a six-year-old invest the money she has in her savings account?" My question was answered by guest host David Chilton, author of the Canadian bestseller, The Wealthy Barber.
Chilton did not mention gold on the show but the next day he called me and suggested that my daughter consider buying a one-quarter ounce maple leaf 99% pure gold coin. I had to ask him where to buy one and he told me that Scotiabank under the name ScotiaMocatta sells them. So I called our local Scotiabank branch to get the scoop and here are the steps we are going to have to take to purchase a gold coin.
First, in order to buy a gold coin in her name, my daughter has to have photo ID (such as a passport) plus a social insurance number. Then we have to go to the branch between 9 a.m. and 1 p.m. (for those of us on Pacific Time) on a weekday while the markets are open. What happens is that when you arrive at the reception desk, they have to call in and get you a quote based on the current price of gold. Then you pay (cash only if you are not a Scotiabank customer) and place your order. The coin is shipped, at your expense, to the bank branch and you have to pick it up.
My daughter has not picked up her gold coin for two reasons. First, the price of gold is at an all time high (check the live charts here). Second, we have been toying with the idea of shopping around to get the best deal on the commission or service fees that you have to pay when you buy a gold coin.
Some friends have recommended certain coin dealers but I'm not overly confident about those. I think that in the end we probably will buy from the bank but when...I don't know.
Do we wait a few weeks and see if stocks go up and gold goes down? Or are investors really freaking out about the instability in the market and will the price of gold just keep going higher? It is possible that yesterday's high of $1276.50 USD (the price is always quoted in USD) will seem like a bargain a year from now.
Anyway...whether she buys her coin today, tomorrow or next year, the main thing is that my daughter is learning how to watch prices and read charts and to understand the instability and risk that comes along with growing your money.
Copyright 2010. Laura Thomas. All Rights Reserved.