As long as people walk the earth, scammers will try to take advantage of unknowing people. When it comes to investing, this couldn’t be more true. The Social Security ponzie scheme, get rich quick stock “tips”, so called “cash now” advertisements — the financial world is filled with scammy offers.
Unfortunately, this also includes the world of gold. Almost every major gold website includes some shady offers, if not downright scams. Penny stocks that aren’t worth a penny, gold coins that aren’t worth what they’re being sold for, as well as some investors even manipulating the stock market in order to sell information — seriously.
The 3 Basic Scams About Gold
Here are a few of the more common scams that exist related to gold. They overlap a little, but I separated the scams for the sake of clarity.
- Over-Hyped Penny Stocks. Most penny stocks are worth, well, a penny. They’re usually pretty close to completely collapsing and going bankrupt. They’re absurdly risky. Penny stocks related to gold require a ton of different variables to succeed. You shouldn’t buy penny stocks related to mining, whether it’s gold, silver, oil, natural gas, or anything else — unless you’ve done a lot of research. Nearly every claim about these stocks will essentially be fabrications and lies. So many scams in the “penny stock” arena.
- Pump-and-Dump Stocks. Anyone who is selling membership services and claims their stock picks have increased every time they pitch them — it’s for a reason. Mostly because they just pitched the stocks. If you tell 500,000 people to put a few thousand into a small company, that companies stocks will go through the roof afterwards. Then it’ll drop, and everyone loses money — that’s what they forget to tell people. This is pretty common for gold stocks and silver stocks.
- Overpriced “Rare” Coins. This is probably the most common scam. So many bullion companies will have investors call them on the phone. Once on the phone the dealer will talk about inflation and why gold is going up, and then toward the end of the call, the dealer will make a pitch about some “rare” coin. Of course, the coin isn’t that rare, and it’s usually overpriced. Sometimes it’s as high as 20x the price it should be. The sad part? Rare coins that happen to be gold aren’t the same thing as gold bullion coins for investing in gold — they’re different types of investments. This is the old bait and switch.
Speaking of gold coins, I’m in the middle of writing a short little 6 page report on investing in gold coins. It’s going to be a free download. I’ve decided to put it together because gold coins are a common way investors buy gold, so it seems like they should have a comprehensive yet short guide before they go shopping for coins.
Join Over 8,000 Investors:
In less than 15 minutes a week, you'll learn everything you need to know about gold prices, the collapsing dollar, and the real inflation rate.
Thousands of investors have already signed up for the newsletter and are getting the info for free:
