You have many choices.
In the following
paragraphs, you'll discover five ways to invest in gold. Based on your level of
market experience and familiarity with products, one of these will be
appropriate for you.
-
Direct
ownership.
There is nothing like gold bullion, the ultimate expression of pure value.
Historically, many civilizations have recognized the permanence of gold's
value. For example, Egyptian civilizations buried vast amounts of gold with
deceased pharaohs in the belief that they would be able to use it in the
afterlife. Great wars were fought, among other reasons, to pillage stores of
gold. Why the allure? The answer: Gold is the only real money, and its value
cannot be changed or controlled by government fiat-the underlying reason for
governments to go off the gold standard, unfortunately.Gold's value will
rise based on the pure forces of supply and demand, no matter what Mr.
Greenspan decrees regarding interest rates or greenbacks in circulation. The
big disadvantage to owning gold is that it tends to trade with a wide spread
between bid and ask prices. So don't expect to turn a fast profit. You'll
buy at retail and sell at wholesale, so you'll need a big price jump just to
break even. However, you should not view gold as a speculative asset, but a
defensive asset for holding value. Since your dollars are going to fall in
value, gold is the best place to preserve value. The best forms for gold
ownership are through minted coins: one-ounce South African Krugerrands,
Canadian Maple Leafs, or American Eagles.
-
Gold
exchange-traded funds.
The recent explosion in exchange traded funds (ETFs) presents an even more
interesting way to invest in gold. An ETF is a type of mutual fund that
trades on a stock exchange like an ordinary stock. The ETF's exact portfolio
is fixed in advance and does not change. Thus, the two gold ETFs that trade
in the United States both hold gold bullion as their one and only asset. You
can locate these two ETFs under the symbol "GLD" (for the streetTRACKS Gold
Trust) and "IAU" (for the iShares COMEX Gold Trust). Either ETF offers a
practical way to hold gold in an investment portfolio.
-
Gold
mutual funds.
For people who are hesitant to invest in physical gold, but still desire
some exposure to the precious metal, gold mutual funds provide a helpful
alternative. These funds hold portfolios of gold stocks-that is, the stocks
of companies like Newmont Mining that mine for gold. Newmont is an example
of a senior gold stock. A senior is a large, well-capitalized company that
has been around several years and has a profitable track record. They tend
to own established mines that produce known quantities of gold each year.
For many investors, selection of such a company is a more moderate or
conservative play (versus picking up cheap shares in fairly young
companies).
-
Junior
gold stocks.
This level of stock is more speculative. Junior stocks are less likely to
own productive mines, and may be exploration plays-with higher potential
profits but also with greater risk of loss. Capitalization is likely to be
smaller than capitalization of the senior gold stocks. This range of
investments is for investors whose risk tolerance is broader, and who accept
the possibility of gold-based losses in exchange for the potential for
triple-digit gains.
-
Gold
options and futures.
For the more sophisticated and experienced investor, options allow you to
speculate in gold prices. But in the options market, you can speculate on
price movements in either direction. If you buy a call, you are hoping
prices will rise. A call fixes the purchase price so the higher that price
goes, the greater the margin between your fixed option price and current
market price. When you buy a put, you expect the price to fall. Buying
options is risky, and more people lose than win. In fact, about
three-fourths of all options bought expire worthless. The options market is
complex and requires experience and understanding. To generalize, options
possess two key traits-one bad and one good. The good trait is that they
enable an investor to control a large investment with a small, and limited,
amount of money. The bad trait is that options expire within a fixed period
of time. Thus, for the buyer time is the enemy because as the expiration
date gets closer, an option's "time value" disappears. Anyone investing in
options needs to understand all of the risks before they spend money. The
futures market is far too complex for the vast majority of investors. Even
experienced options investors recognize the high risk nature of the futures
market. Considering the range of ways to get into the gold market, futures
trading is the most complex and, while big fortunes could be made, they can
also be lost in an instant.
We cannot know,
predict, or even guess, when the demise of the dollar is going to occur, or how
quickly it will take place. But we do know it is going to occur. The tragic
mismanagement of monetary policy by the Fed over many years has made this
inevitable.
Removing the U.S.
monetary system from the gold standard was not merely a decision of short-term
effect. Nixon may have seen the move as a means for solving current economic
problems,
but it had long-lasting impacts: trade deficits, growing federal debt, and the
ability to print money endlessly and build a new credit-based economy.
Internationally, the decision by the United
States virtually forced all other major currencies to also go off the
gold standard.
Any investor who views
the economic situation broadly-both domestically and internationally-can see
that trouble lies ahead. We have delayed the inevitable because China is a
partner in our
monetary woes.
The Chinese are
building their own debt on the dubious foundation of the U.S. dollar, and other
Asian economies have been forced to go along for the ride. When the dollar
falls, many
other countries will suffer as well. The offset, logically, is found in
commodities. Investing in oil stocks makes sense, for example, because the price
of oil is rising and as it becomes more difficult
to drill oil those
companies that own drilling and exploration operations will benefit. It makes
sense to invest in other commodities as well.
The tangible asset play
is clearly where future value is going to lie. With China's never-ending need
for coal, iron ore, tungsten, copper, oil, and other metals, the future of
tangible markets
is the bright spot in the gloomy financially
based economics of the world.
Leading the charge is
gold. It is ironic that monetary policy follows
a predictable pattern.
Governments overprint
money and their currency crashes. Inevitably, they always return to gold, but
often at great expense and with considerable suffering. We find ourselves in
another one of those
moments in time where irresponsible monetary policy has put us at risk. But we
don't have to simply hold on and wait for the demise of the dollar; we can take
action now because
that demise is great for your portfolio-if you
position yourself in tangible assets rather than in empty fiat promises and the
bizarre economic premise of U.S. monetary policy.
Goods and services can
be paid for only with goods and services. Currency is nothing but an IOU, a
promissory note that is not backed up with any tangible value. Once we reach our
national credit limit, monetary policy will be forced to retreat. When that
happens, traditional investors and their savings accounts are going to be hit
hard. The beneficiary of the falling dollar will be the investor whose holdings
emphasize tangible value of goods: resources and precious metals.
Every danger to one
group of people is invariably an opportunity to another. It all depends on where
you position yourself. Those investors positioned in dollar-based investments
are going to suffer
the loss of purchasing power when the dollar's
value disappears. Those who have moved their investments to higher ground will
benefit from the change.
Addison Wiggin, Автор
to one
P.S. As inflation is
threatening to eat us alive- gold is the best friend you have. Forgive the pun,
you truly have a golden opportunity to grab the best commodity on the
market..for less than a penny per ounce. Read more here:
Related Links on Gold Investing:
To
buy:
http://www.swissamerica.com/
To read before buying:
Kitco.com - one of the world's premier retailers of precious metals.
World Gold Council - The global advocate for gold.
Gold-Eagle - An informational site that provides articles, analysis, and
charts about gold investment trends.
The Gold Rush - A complete compendium on the California Gold Rush
A Golden Answer: Protection Against Untrustworthy Paper Currencies
Gold:
The Truth About Gold
Investing in Gold:
The 5 Best Ways to Invest in Gold
Gold:Let the Hoarding Begin…
Investing In Gold Dreaming of a Gold Christmas
Hard Money Bull Market The Bulls and Bears of Precious Metals
Gold Standard: The Next Gold Standard