Let's talk about bullion. Basically, it's just raw gold or silver that's been formed into coins or bars. Now, coins are usually round, while bars are rectangular, but other than that, there's not much of a difference.
Except for the fact that bars usually have serial numbers stamped onto them by the mint that made them.
When you're buying bullion, the price you pay includes a "premium" which takes care of all the work that went into getting the physical metal into your hands. Premiums on bullion are typically a few percentage points above spot price.
Numismatics, on the other hand, are collectible coins – coins collected for their rarity or historical significance, rather than their metal value. With numismatics, you pay a higher premium for the collectible value of the coin.
Since the collectible is largely based on sentimental attachment rather than the intrinsic value of the gold, it’s highly subjective and much harder to evaluate the market value.
In contrast, bullion's value is based almost entirely on the amount of gold it contains. One ounce is one ounce, period.
The foundation of any metal investor’s portfolio is bullion, and unlike collectible coins, they don’t require you to become a coin expert before you purchase them.
Bottom line, stick with the basics.
When a dealer tells you their most popular product is a rare European gold coin or some other rare thing, they may be telling the truth, but the part they’re leaving out is that their salespeople make giant commissions on those items.
These dealers typically push numismatic coins and tell you that you need to hold onto them for 3 to 7 years to see any appreciation. It's all nonsense! Truth is, It only benefits the dealer.
Most of these shady dealers are all about promoting numismatic coins because they can charge a hefty, arbitrary premium on them. I'm talking anywhere from 20% to 100% over the actual metal value.
And get this, the premium has more to do with the story behind the coin than its actual market value. Crazy!
When it comes to rare coins, they may seem like they have a high value, but selling them can be a real challenge. See, the thing is, because of their rarity, you gotta find one of the few people in the world who are interested in their collectible value rather than just their metal content.
Bullion, on the other hand, is fungible and easy to sell anytime, anywhere.
