Gold, Silver and Joe Six Pack

You have probably noticed the increasing number of TV commercials, advocating the purchase of gold. Even so, only a small percentage of families own any gold at all. Contrast this with over 2/3 having stocks, in some form, in their investment portfolios. Why is this so, if holding gold is an important element in diversifying a family’s investment portfolio?

First, most folks are familiar with the process of opening or adding to a traditional saving or investment account. It can be done by mail, on-line, or in person at a local office or bank. Where does a person go to deal in gold or silver? Probably by responding to an advertisement’s 800 number or website. But how does one know that it is a reputable company? If you ask your friendly banker, he likely won’t have the foggiest idea. Nor is he interested, because gold and silver are not products he sells.

Second, if one decides to invest in gold or silver, the question arises, what form? Should it be bars, bullion, coins, or mutual fund gold mining stocks? Assuming coins, the purchaser may be dismayed to learn that one high-grade gold coin may cost more than $1000. But of course, that’s why gold is called a precious metal. Silver coins are generally much cheaper. Another stumbling block, might be that payment is required up front.

Another deterrent can be that the so-called financial experts, decry the value of precious metal holdings. These are the people we see on the Saturday morning TV shows, huckstering individual stocks. Never mind that most individuals should be purchasing mutual funds, rather than individual securities. The “experts” are primarily interested in making buck by unloading the current “hot” stocks on an ill-informed public. Ask them about gold or silver, and you get some ridiculous answer as to why it is not a good investment.

Finally, most people do not understand that gold or silver are not just investment products like stocks, bonds, or savings accounts. Precious metals are a hedge, an insurance against the depreciation of paper money. If we examine the price of the dollar in the last few years, against other currencies like the Euro, we note the value trend line is downward. The price of gold and silver fluctuates, but the underlying value is always there.

In summary, while this article has dealt with negatives, we urge the reader not to be dismayed, but to explore the advantages of silver and gold. You will not be disappointed.