Precious Metals Can Help Balance Your Portfolio
Precious metals are poised to take off. Alert
investors could profit handsomely. Those who fail to
participate could miss out on the most exciting profit
opportunity of the '90s.
The signs are unmistakable:
- The Toronto Stock Exchange Gold and Silver Index
has reached an all-time high. The Philadelphia Gold
and Silver Index has more than doubled.
- Eleven of the top 13 mutual funds for 1993 were
gold and precious metals funds.
Meanwhile...the federal budget is out of control.
The national debt is $4.5 trillion. and unless
Congress curtails spending, you're in for higher and
higher taxes as well as the worst inflation ever. Add
it all up, and it means a move by investors to precious
metals.
When rising inflation makes it more costly to hold
dollars the demand for gold replaces the demand for
dollars during uncertain times -- and the price of gold
goes up. Silver and platinum generally do also. This
isn't new; it has been the case all along. There are
no financial instruments, new or old, that can provide
the inflation protection that gold can. And during
times of rising inflation, nothing is as good as gold
in responding well to bad news.
Many financial advisors suggest keeping 15% to 20%
of your investments in gold and other precious metals.
Most people only think about stocks, bonds, and
annuities, and overlook the value of diversifying some
of their money into precious metals.
A quiet transition has been occurring in the gold
market in recent years, and last year, China became the
world's largest gold consumer. It's not just China
either -- it's a trend that's firmly in place
throughout the Far East. While most developed Western
societies are coping with the legacy of decades of
living beyond their means, China and much of the rest
of the Far East are entering the 21st century with a
bang.
Whether it's inspired by the inflation that
accompanies these overheated economies, or simply the
inevitability that some portion of newly created wealth
will find its way into gold, the gold market has strong
underpinnings that will support much higher prices over
the next few years.
Gold serves as an investment as well as a form of
storing your money -- that will never become worthless.
First and foremost, gold is a physical asset. This
distinguishes it from paper financial instruments like
stocks and bonds. When gold performs well as an
investment, it often means that most of your other
investments are performing poorly. Just a look at the
current rates you can get on a bank deposit will tell
you how true this is.
Gold should be the foundation of your investment
holdings because for thousands of years it has been the
primary means by which people, as well as
civilizations, have preserved their wealth.
Gold is also a traditional means of protection
from inflation. Some investors have been disappointed
with the performance of gold in the past decade, but
they are forgetting the primary purpose of gold as a
hedge against inflation. But because there has been
very little inflation in the American economy in the
past decade does not mean that gold has been a bad
investment. The proper comparison is not to other
forms of investment performance, but much like buying
fire insurance and not having the house burn down. In
this case the gold did exactly what it was supposed to
do -- provide a store of value with inflation
protection.
Gold is the most effective protection of your
purchasing power. This is illustrated by comparing its
value today with its value in Biblical times. From the
Old Testament we learn that during the reign of King
Nebuchadnezzar, an ounce of gold bought 350 loaves of
bread. An ounce of gold today will still buy about 350
loaves of bread.
We have two suggestions as to the best ways to own
gold -- special ways that are not widely known:
Gold coins may be purchased from precious
metals dealers, precious metals exchange companies,
major banks and many brokerage firms.
But an even better source for gold coins and
bullion is a broker/dealer founded in 1982 by two of
the former senior officers of Deak-Perera, at the time
the nation's oldest and largest precious metals and
foreign exchange firm. International Financial
Consultants Inc., Suite 400A, 1700 Rockville Pike,
Rockville MD 20852 are not "coin dealers," meaning that
they don't take positions in the precious metals,
therefore creating a bias to sell certain items held in
inventory. Instead, through their domestic and
international network of wholesalers they buy and sell
at competitive prices.
They are well known in the financial newsletter
industry and at one time or another have been
recognized as a "recommended vendor" by many of the
writers in the newsletter industry. The principals,
Michael Checkan and Glen Kirsch have been in the
precious metals/foreign exchange business for a
combined total of 50 years.
Another way to invest in the current gold
boom, without paying the outrageous commissions (plus
state sales taxes) involved with buying coins from a
dealer is through a gold accumulation plan.
Ueberseebank, a major Swiss bank, operates a pooled
gold-purchase program called SwissGold, which allows
you to enjoy all the benefits of investing in gold
without the responsibilities and costs of handling and
storage.
Buying gold through accumulation programs can
provide you with a number of advantages. You can make
purchases at any time. Your order will be combined
with other orders received that same day, and will be
executed the next business day. Since Ueberseebank
buys and sells in the wholesale bullion dealer market,
you are assured of competitive prices.
Because you are investing by the dollar amount and
not by the ounce, your purchases are made in whole or
partial ounces. And you pay discounted commission
rates that are up to 40% less than a regular broker
charges on transactions.
Your gold is stored in major depositories and is
fully insured. Your record keeping is done for you,
and you will receive a confirmation of each transaction
and a periodic summary statement. While you leave your
gold in an accumulation program, you do not have to pay
state or local taxes.
You can liquidate your accumulation plan holdings
at any time. And when you do decide to sell, you will
avoid paying costly assaying fees for weight and purity
testing.
Information on SwissGold may be obtained from:
JML SwissGold, Dept. 212, Baarerstrasse 53, 6304 Zug,
Switzerland. These people have been in business for
over 20 years, and are highly recommended. Such
investments are completely legal for Americans. They
are prompt and efficient at answering inquiries.
Insiders have known for decades how to buy gold the
Swiss way.
