Gold Questions & Answers...

What kind of gold should I buy?

Answer. The most asked question of all. What type of gold you buy depends upon your goals.

If your goal is simply to capitalize on price movement, then bullion coins or just bullion is the answer. If you are interested in long-term asset preservation then you might want to include a variety of pre-1933 European and American gold coins. These gold coins are historical items and afford the investor a greater degree of safety than gold bullion.

Q. When should I buy?

A. When you need it. Don not think of gold purchases as you would traditional investments such as stock or real estate. The real goal is to diversify so that your overall wealth is not compromised by economic disaster.

Q. Why not wait for the necessity to arise, then buy gold?

A. During the course of 2009, when concern about the financial crisis was peaking, there were periods of gold coin bottlenecks and actual shortages. The national mints could not keep up with public demand, and the flow of older gold from Europe was slowed by accelerating demand both there and in the United States. Premiums shot-up and a wild scramble developed for the available gold, even at rapidly escalating prices.

These events pointed up some of the problems inherent to the contemporary gold market. During times when demand for is strong, you cannot call and order gold coins like you can most other consumer items. Even running at full capacity, the manufacturers (the national mints) cannot keep up with demand surges like the one we had in mid-2008 and again in early 2009. This is true of older gold coins too. They are swiftly bought up and become hard to acquire. Since these coins aren’t being made anymore, their demand become greater.

Q. What percentage of my assets should I invest in gold?

A. 10% to 20% of your investment portfolio should consist of gold. How high you go depends upon how concerned you are about the current economic, financial and political situation.

Q. Can you briefly describe what you believe to be the biggest mistake investors make when starting out as gold owners?

A. The biggest trap investors fall into is buying a gold investment that bears little or no relationship to his or her objectives. Take safe-haven investors for example. That group makes up 90% of our clientele, and probably a good 75% of the current physical gold market. Most often the safe-haven investor simply wants to add gold coins to his or her portfolio mix, but too often this same investor ends up instead with a leveraged (financed) gold position or a handful of exotic rare coins (often costing five or six figures). These have little to do with safe-haven investing, and most investors would be well served to avoid them — except as a sideline.

Q. What is your view of gold stocks?

A. Many people own gold stocks and that is fine for many investors. However, it should be emphasized that gold stocks are not a substitute for real gold ownership, that is, in its physical form as coins and bars.

Q. What about gold futures contracts?

A. Futures contracts are generally considered one of the most speculative arenas in the investment marketplace. The investor’s exposure to the market is leveraged and the moves both up and down are greatly exaggerated. Something like 9 out of 10 investors who enter the futures market come away losers. For someone looking to hedge his or her portfolio against economic and financial risk, this is a poor substitute for owning the metal itself.

Q. Please summarize: What is the best approach for the safe-haven investor?

A. If you want to protect yourself against inflation, deflation, stock market weakness and potential currency problems — in other words, if you want to hedge financial uncertainties, there is only one portfolio item that will serve you in all seasons and under most circumstances — gold coins and bullion. Gold is the bedrock to any investment portfolio.

Be sure to request our FREE “Gold Investment Guide”. The guide will not only educate you about gold opportunities but will also show you what to avoid in gold investments.