Recent polls leave no doubt that Americans have grown weary of politicians, whom they see as being long on rhetoric and short on results. They have had their fill of squabbling over the fiscal cliff because they went over their own cliff in 2008. They are ready to roll up their sleeves and pitch in to get the job done, whatever it takes.
At the core of America’s discomfort is the loss of economic security that we had enjoyed most of our lives. In that, gold can provide where the government has failed.
The Time Proven Protection of Gold
Security comes from knowing that the wealth you have worked so hard to earn will be there for your future wellbeing and for that of your children. It comes from knowing that should the dollar fail due to unsupportable national debt, you will not be left destitute. It comes from knowing that the next stock market crash won’t shatter your retirement dreams. And it comes from knowing that you will be able to provide for your family even if the unimaginable should come to be.
There has never been a time in history when gold has failed to provide that security. When every currency has been refused, gold has always been universally accepted in exchange for the goods and services that define our quality of life.
Such security, however, comes only in the form of physical gold.
Physical Gold Investments
Physical gold is a tangible asset, without liability to any other party and no restrictions to its use. When you take possession of physical gold you have complete control over your investment and your gold will always be at your command to serve your immediate needs.
Thanks to the convenient size of gold products, storing your gold requires no more than a bank safety deposit box, and a prudent quantity can even be held in your home.
For investment purposes there are two forms of gold from which to choose: bullion and rare gold coins.
Gold bullion is the most basic gold product and therefore it is traded very near the spot price. The most common gold bullion products are also exceptionally liquid and can be instantly traded anywhere in the world.
There are two general types of gold bullion, each of which is commonly available in sizes ranging from 1/20 ounce to as much as a kilogram:
- Modern Gold Bullion Coins. These coins are minted by numerous nations as legal tender, although their face value is only symbolic. The most popular coins with investors contain one ounce of pure gold, which is guaranteed by the issuing government. Three of the most heavily traded modern gold bullion coins, and therefore the most highly recommended for investment, are the American Eagle, the Canadian Maple Leaf, and the South African Krugerrand.
- Gold Bullion Bars. Also known as ingots, gold bars are privately refined and produced. In addition to providing investment grade gold, bullion bars are the raw material from which all other gold products are made. There are numerous producers of gold bars who guarantee their weight and purity. To ensure the highest liquidity and security we strongly recommend gold bars from Credit Suisse, the world’s most reputable and trusted producer.
Rare Gold Coins
Rare gold coins were minted for circulation up until 1933. Their numismatic value adds additional potential for investment growth, which is further augmented by growing investment demand for their limited supply.
Today investors can buy rare gold coins with complete confidence, thanks to third party certification of their authenticity and grade. However, coin grading companies have steadily grown in number along with the ballooning investment interest, and most of the newcomers are dubious at best. The first and most highly respected service is PCGS, and the coins they grade consistently fetch the highest market value.
The best rare gold coins for investment are those that are most heavily traded – and therefore have the highest liquidity. Topping the list of the most popular rare gold coins are the Saint-Gaudens Double Eagle, the Lady Liberty Double Eagle, and the Indian Eagle.
There are many other ways to buy gold, of course, but none that offer the security, liquidity, and control that comes with private possession of physical gold.
Paper Gold Investments
There are a great number of “paper gold” products today that are promoted as being safe and convenient alternatives to physical gold while having a greater potential for returns. In truth, they are none of those things.
As with any equity, paper gold carries the risk of third-party liability, sensitivity to general conditions on the stock market, and potential for total loss. Compared to physical gold, they are also highly illiquid. The four most common types of paper gold are:
- The Gold Exchange Traded Fund (ETF). When purchased, a share in an ETF typically represents 1/10 ounce of gold. However, that amounts is continually reduced as the fund sells gold to cover its expenses. Furthermore, while it is technically possible to redeem shares for physical gold, it is a difficult, slow, and costly process. A new twist on the ETF is the closed-end mutual fund that allows the exchange of shares for physical gold once per month. The exchange, however, can be only for 400-ounce London good delivery bars and the fund trades at unusually high premiums.
- The Gold Exchange Traded Note (ETN). ETNs are debt instruments that pay a return based on the gold futures market. Like futures contracts, ETNs can be traded long or short. Also like futures contracts, ETNs are pure speculation with no principle protection, posing the risk of total loss of investment.
- The Gold Pool Account. Pool accounts are grants for unallocated gold. The investor essentially becomes a creditor for bullion that the supplier may not necessarily possess. In other words, investing in a pool account is tantamount to issuing an unsecured loan – putting the investment at extraordinary risk.
- Gold Stocks. Gold stocks include investment in miners, junior miners, and exploration companies. Among the added risk inherent with gold stocks are a high probability of inept management, explorations that fail, mines that play out, and – because mines tend to be in politically unstable regions – the threat of nationalization.
Politicians at every level have promised that if elected they will create jobs, cut government spending, bring the debt under control, and get the economy moving again. But it took more than four decades to create the mess we are in, and people are starting to realize than even if all sides were to work in unison it will take years to mend.
Fortunately, we needn’t gamble the future on a broken system. We can take matters into our own hands and prepare ourselves for the future. No matter what lies in store for us, you can regain your sense of security and once again enjoy peace of mind by investing in physical gold.
A good place to start is to get your free copy of our “2013 Insider’s Guide To Gold Investing” by clicking here. If you would like to explore which gold products are perfectly suited to your individual needs, just call North America’s premier gold dealer at 1-800-425-5672 and ask to speak with one of our highly trained expert gold investment advisors.