START-UP ADVICE

INVEST IT
DIVERSIFY YOUR
PORTFOLIO AND
INVEST IN GOLD
SOVEREIGNS
Any investment portfolio should be diverse and as part
of that diversification you would be well advised to invest
in gold. Mike Corica from The Bullion Centre, takes you
through the benefits of gold investment, with a particular
focus on the most flexible form of gold investment,
Sovereigns.
Gold is a safe haven investment,
a way of protecting your wealth
in uncertain times and a hedge
against inflation but, with so many
different ways to buy gold which is
the best option?
You could buy shares in a gold
mining company but these will
be affected by the company’s
performance in extracting the gold as well as the
underlying gold price. There always exchangetraded
funds (ETF’S) a paper version where you
never actually take physical delivery of your gold
but, with estimations that the paper gold market
is around 100 times larger than the amount of
physical gold in the world this again comes with
added risk.
The safest way to ensure you have a gold
investment portfolio is to take delivery of gold
bullion bars and coins. You can control what
happens to them, but just like the whole of your
portfolio it is recommended that you have a
diverse gold bullion portfolio.
Flexibility
A general rule of thumb is the larger the bar
you buy the lower the premium you will pay, this
does however limit your flexibility. If you needed to
liquidate part of your investment and you had put
it all in one bar, then you would have to liquidate
all of it.
Instead it is better to have a mix of bars and
coins that will give you the most flexibility to
ensure you can react to any situation you may find
yourself in and one of the best and most flexible
forms of investment is the gold Sovereign.
Collectability
A semi-numismatic coin like the Sovereign is
valued by both gold investors and coin collectors
and as such can trade for much higher premiums
than just the underlying gold value. Obviously
the rarer the coin the higher it is valued, a great
example of this is a 1937 Edward VIII Sovereign,
one of only six, that recently sold at auction for
£516,000 around 2880 time the value of its gold
content on the day.
Whilst it is unlikely that any of us will ever see
a 1937 Edward VIII Sovereign it is still possible to
buy old gold Sovereigns at near bullion prices that
will appreciate in value over time as they become
scarcer. Coins like the King George V or a Queen
Victoria Old Head only cost a few pounds more
than a 2014 Sovereign but, due to their collectible
nature could see greater increases than just its
gold value.
Condition
The condition of a coin will also affect its value
in two ways, the better the condition the higher it
is prized by collectors but, this also goes for gold
investors. A badly worn or damaged coin could
well have lost some of its gold weight and are
therefore worth less to an investor.
Although there is no officially recognised system
for grading Sovereigns in the UK, they are widely
graded in the following terms:-
• Proof – Perfect quality