Play all audios:
That makes gold a bad investment, according to famed investor Warren Buffett. In his 2011 letter to shareholders of Berkshire Hathaway, he lumped in gold with other investments in “assets
that will never produce anything, but that are purchased in the buyer's hope that someone else ... will pay more for them in the future.” If you buy stock in an operating company, it
can produce assets and dividends beyond the initial money you put in. But, wrote Buffett, “If you own one ounce of gold for an eternity, you will still own one ounce at its end.” ...“assets
that will never produce anything, but that are purchased in the buyer's hope that someone else ... will pay more for them in the future.” — Warren Buffett TIPS FOR BUYING But if you
are interested in buying gold to protect yourself, here are some tips. AVOID COLLECTIBLE GOLD COINS. If you're going to buy a rare coin, do it for its beauty and as an heirloom. Only
extremely knowledgeable collectors should invest in rare coins, since tiny differences in condition can slash tens of thousands of dollars from the value of a collectible coin. A 1909
“Double Eagle,” for example, can be worth anywhere from $1,685 — basically about the gold bullion price — to $90,000 for a virtually untouched specimen, according to Professional Coin
Grading Services. CONSIDER BULLION COINS IF YOU CAN STORE THEM SAFELY. The U.S. mint creates Gold Eagle bullion coins in one-tenth-ounce, one-quarter-ounce, half-ounce and one-ounce
denominations. The mint doesn't sell bullion coins; you can buy them through authorized dealers. Your price will be roughly the current price of gold, plus whatever markup the dealer
charges. Typically, those premiums run from 5 to 8 percent. One problem with taking physical possession of gold is that thieves can also take physical possession of your gold. If you opt to
store your coins in a safe-deposit box, you'll need to pay annual fees for the box, as well as for insurance on the items within the box, since the FDIC doesn't cover the contents
of safe-deposit boxes. Be very wary of companies that offer to store your gold for you. PLAN FOR TAXES. The IRS treats gold and other precious metals as collectibles, not securities. Profits
on the sale of collectibles are taxed at the rate of 28 percent, rather than the lower rates — 20 percent at most — applied to long-term capital gains on securities. LOOK AT GOLD FUNDS.
Exchange-traded funds (ETFs) trade minute by minute on the stock exchanges, just as shares of ordinary stock do. Physical gold ETFs invest in actual bullion, so you get the advantage of the
fund's buying power — lower markups than individual investors would get — as well as instant access to your investment.