Do You Own Gold?

I read an interesting piece yesterday from a well-respected investment guru. He informed his readers that he owns gold and has for some time. Basically, there are two ways to own gold, you buy it and hold it. This would be for insurance.

The other way is as an investment. With this gold you are looking at making a return on your investment. This is much harder to accomplish, but over the last three years, this has been a good one.

The insurance is different. You would hope that nothing happens that would force you to use your insurance, but it never hurts to be prepared. Just as most of us pay life insurance premiums and auto insurance premiums, owning gold is like paying an insurance premium. We certainly do not want to die or be involved in an auto accident. Nor do we want to go through a currency or financial crisis of some sort, but the insurance is there, just the same.

Why gold? It is a constant store of value. You see, when the price of gold goes up, it is not that the value of gold has increased, but the value of money has decreased. So instead of keeping all of your money in dollars or some other paper currency, the gold acts as a hedge against loss.

Now I am not saying that you should keep all of your cash in gold, just some of it. A little will go a long way if gold goes anywhere near its natural high based on the amount of dollars floating around the world.

To give you an idea of how high gold could go; look at the purchasing power of gold during the great depression. An ounce of gold could purchase a brand new Bentley automobile or a hotel in San Francisco. Just four ounces purchased 5,400 acres of prime real estate in California.

Please understand that just because the price of these items has risen so high in recent years does not indicate that they are worth that much hard currency (gold). It means that the purchasing power of the dollar has lost almost all of its value.

The dollar has lost 95% of its value since 1913 and if inflation continues at a modest 2-3% over the next 10-15 years, the dollar will lose another 50% of its value. Gold allows you to rest a little easier at night, knowing that you are insured.

And hey, if nothing happens, and the economy continues to chug along, you can always pass down your gold holdings to your children. I do not know of any other type of insurance that you can purchase once and hand down from generation to generation. Do you?

Remember yesterday I talked about our Risk Adjsuted Asset Management System (RAAMS)? And how it has returned a whopping 162% since 2000? Well, only 10% of our portfolio is in precious metals (gold and silver). Want to find out more, click on the link below and receive a free report.


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