RICHMOND, VA (WWBT) – Gold is hot right now but be careful what you consider an investment. Gray Hall investigated and talked to experts about what you should look out for.
You probably have seen the commercial and maybe even bought a Buffalo Tribute Proof Coin. But do you know what you really bought?
The Consumer Warning Network says the ad is deceptive. Paul Sims, with Yesterday's Change has been in the gold business 40-years, and agrees the commercial is misleading, but wouldn't call it a scam.
"That is over stated. It would be sort of like showing the shampoo where if you use it all the girls will follow you around. It's not deceptive, it's puffed up," he said.
For about $20 you can get one of the coins. Eventually, the ad does say the coin is gold clad. Sims says bottom line, don't expect a fake coin to be a real investment.
"Gold is over $1400 an ounce, you can't buy it for less than that. So if you are paying $10 for something or $20 for something, just be aware it is gold clad. It doesn't mean it's not a worthwhile item, it just means it is not really gold," Sims said.
If you are going to invest in gold coins or any type of gold the experts say know what you are getting and understand your risk.
"No matter what you do, you should have the appropriate risk management strategy in place as well to protect yourself should it not go the way you are intending it to go," said Chris White, a Portfolio Manger, with Gibson Volatility Management.
He says gold is a good investment. He warns though, the gold bubble could burst. When that might happen, he says is unpredictable.
"The risk is the same for any liquid investment. It is the same for stocks, the same for bonds, the same for gold, the same for silver. It can go up or down," said Sims.
Sims showed us the real buffalo coin, worth about $1400. He says there is no problem with the advertised price of the replica. If you do buy it -- don't run to the bank.
"Know what you are buying; that it is a tribute coin. That the price they are selling it for is certainly not a problem, just don't think you are buying pure gold," he said.
Sims says research and a little common sense is your best investment. For a look at the Consumer Warning Network article and tips on what to lookout for if you are investing in gold, click here.
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