Buying Gold, Insurance Rates, and Contents of a Safe
Six Things to Consider When Buying Physical Gold
Buying physical gold can be a good way to diversify your investment portfolio, but there are several things you should consider before making a purchase:
- Purity: The purity of gold is measured in karats, with 24 karats being pure gold. Most gold coins and bars are either 22 or 24 karats. Many quality dealers will list the purity of their gold bars as .999 pure.
- Premiums: Dealers often charge a premium over the spot price of gold. This can vary widely depending on the dealer, so it's worth shopping around to find the best price. Remember, the higher the premium, the longer it will take for your investment to become profitable. Also, the dealer may charge higher premiums on “collectible” gold coins. For example, check out the collectible coins on www.moneymetals.com.
- Storage: Storing physical gold securely can be a challenge. You might need to invest in a fireproof safe. In my opinion, paying for a storage service defeats the benefits of owning physical gold. The main benefit is the ability to self-custody the gold.
- Liquidity: While gold is generally considered a liquid asset, selling physical gold is more difficult than selling gold ETFs (ticker IAU). You'll need to find a dealer who is willing to buy it, and you likely will not get the full market price.
- Authenticity: Unfortunately, there are counterfeit gold products out there. Buying from a reputable dealer can help ensure that you're getting genuine gold. Some gold products come with a certificate of authenticity, which can provide additional assurance.
- Value: Consider purchasing different size coins. You may not want to sell an entire 1 oz coin. I typically by gold coins in ¼, ½, and 1 ounce. Always know the current value of gold before buying or selling.
Insurance Rates Trail Inflation
If you have been paying attention to the state rate filings being made by insurance companies, you’ve noticed a common trend. Rates are going up. Here is what is ailing the insurance industry.
- In 2020, most insurance companies were scheduled to take rate increases. However, the Covid lockdown led them to make assumptions that didn’t hold true. Most insurance companies issued rate decreases in 2020, some even issued rebates. Their thought was with people forced to shelter in their homes, less driving would result in fewer claims. However, the lockdown didn’t last as long as they expected and annual claims remained fairly level.
- The combination of financial stimulus and supply chain disruptions lead to soaring prices in used cars and car parts. The cost of claims soared as well. In 2022, the average insurance company paid out more than $120 for every $100 of premium they took in.
- As a result, insurance companies are playing catchup to comply with regulators. As of April of 2023, the four largest insurance companies took the following rate increases:
- State Farm 24%
- Progressive 24.5%
- Allstate 17.3%
- GEICO 40.9%
For more information, check out our recent blog. Remember, rate increases between companies are varying greatly and the open market is likely your best way to find some relief. If you would like our office to research quotes for you, please contact Julie at email@example.com or 419.496.0770.
How to Cash in Physical Stock Certificates
I recently got a call from someone with the following question:
“A family member recently passed away and when we were cleaning out his safe, we found stock certificates. How do we find out if the certificates can be cashed in?"
This is a great question because cashing in physical stock certificates is no longer common knowledge. Transfer agents are the company or entity that keeps track of shareholders and they no longer issue physical stock ownership certificates. This means if you find a family member who still has physical certificates, they likely bought those shares a long time ago. Hopefully the company is still in business. There is a decent chance if not, the original company was purchased by a larger company, which means the family member could now own shares of the acquiring company. If you find stock certificates, here is where I would start to attempt to cash them in.
- Identify the Transfer Agent: The transfer agent is a company that keeps track of stockholders. They are usually a bank or a separate company. The name of the transfer agent should be listed on the stock certificate. If it's not, you can contact the company that issued the stock to find out who the transfer agent is.
- Verify the Certificate: Contact the transfer agent and verify that the stock certificate is still valid. They will be able to tell you if the company still exists and if the stock is still worth anything.
- Sign the Certificate: If the stock certificate is valid, sign it in the presence of a guarantor, which could be a bank or broker. They will confirm your identity and guarantee your signature. This is called a Medallion Signature Guarantee and it's required by most transfer agents. Note that a notary public cannot provide a Medallion Signature Guarantee.
- Complete the Transfer Form: The transfer agent will provide you with a form to transfer the stock to your name. Fill out the form and send it, along with the stock certificate, to the transfer agent. The agent will then register the stock in your name.
- Sell the Stock: Once the stock is in your name, you can sell it. The transfer agent can usually do this for you, or you can sell it through a broker. Be aware that you may need to pay taxes on any profits you make from the sale.
Remember, it's always a good idea to keep a copy of the front and back of the stock certificate for your records before you send it in. Also, consider sending the certificate via registered mail with return receipt requested, so you have proof that the transfer agent received it.
Crosby Advisory Group, LLC specializes in wealth accumulation, asset protection, and business growth. If you have a question, contact one of our experts.
- Business Growth: Carly Snyder
- Insurance: Julie Maglott
- Financial Planning: Nate Crosby
- General Questions: Macy Vogel
Disclaimer: This newsletter is for informational purposes and does not represent individual investment advice. Crosby Advisory Group, LLC has three branches of services: registered investment advisor, marketing firm, insurance agency. Investing involves risk including the potential loss of principal.