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Eddi McGuire Celebrates Million Dollar Hot Seat Anniversary with ABC

June 10th, 2014 No comments

Eddi McGuire

 

To celebrate Million Dollar Hot Seat’s 1000th episode airing tonight, Eddie McGuire immersed himself in some of Australia’s finest Gold bullion. Help secure your financial wealth with investment grade bullion by contacting us today. Picture: Mark Stewart Source: News Corp Australia

 

 

Weak Gold Prices an Opportunity of a Lifetime for Contrarian Investors?

November 29th, 2013 No comments

Stockcharts

Given the recent further weakness in the price of gold bullion, should investors be running for the exit doors? Some well-known “gold bugs” have recently turned bearish on the precious metal. But I’m on the opposite side of the spectrum; I see the pullback in gold prices as an opportunity of a lifetime for contrarian investors.

The gold bullion price chart below shows the long-term trend in gold bullion is still intact. Since 2001, the precious metal’s price has marched higher. Note there have been many pullbacks along the way, but in all cases, gold bullion prices recovered and moved higher after their pullback. And I believe we will see gold prices recover again from their current price correction.

From a fundamental point of view, demand for the precious metal remains robust. Many central banks have become net buyers of gold bullion over the last couple of years, and consumer buying in gold is very strong. So the question is: with so much negativity towards the precious metal, have we reached peak pessimism on gold bullion?

Just yesterday, Bloomberg ran a story saying hedge fund manager John Paulson would not be investing more of his own money in his gold fund at this time “because it’s not clear when inflation will accelerate.” (Source: Bloomberg, November 25, 2013.)

While investors seem to have turned very bearish on gold bullion, I see it as a bullish sign. If history has taught us one thing, it’s that when there’s increasing pessimism on any investment, a bottom is usually not far away.

So far this year, gold prices have fallen about 30% while the S&P 500 is up about 30%. I can’t see how this trend will continue in an environment where stock prices seem to be rising on nothing else but easy monetary policy. My wager is that in the years ahead, we will look back at 2013 and say, “What a great year that was to buy gold-related investments.”

Weak Gold Prices an Opportunity of a Lifetime for Contrarian Investors

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Gold has achieved a staggering 3,500% return since 1970

November 18th, 2013 No comments

iLarge_Gold

If you were an early investor in gold and have stuck by the precious metal for the past 43 years you will have made a small fortune.

A new report, released by the Centre for Economics & Business Research and CoinInvestDirect, an online precious metals dealer, has found that the gold price has soared by some 3,500% since 1970. This means an investor who spent £27,800 on gold and retained their investment ever since will today be a millionaire.

(In other words, during 1970 an ounce of Gold was US $35.00. In 1970 $45,000 would have bought you 1,285 ounces of Gold. Today, that same 1,285 ounces of Gold have a current US Dollar spot value of  $1,652,327!)

An investor with more modest sums would still be sitting on incredible gains. For instance, an investment of £10,000 would be worth £360,000 today.

However, the price of gold has had a rocky ride over this period, particularly in more recent years. Since 2001 the gold price has risen from $260 to trade at around $1,285 at present.

According to the report one of the main drivers behind gold’s success over the past decade is increased demand from emerging market economies. Fast growing countries, such as Brazil, Russia, India and China, have doubled their gold reserves since 2003. Because there have been more buyers than sellers, the gold price has been well supported.

Gold turns £27,800 into £1m

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Gold Proves More Rewarding than Stocks Over the Past 10 Years

April 10th, 2013 No comments

As far as gold vs. stocks over the last decade, there’s been no contest. It’s been Lebron James vs. Mickey Rooney, Billy Slater vs. Ja’mie King and Gina Rinehart vs. Nathan Tinkler.

Here Are the Facts

Between 2000 and 2012, according to a report by Kitco, the DJIA went up by 17.04%. The NYSE increased by 22.25%. NASDAQ did better, having an increase of 117.73%

According to the Wall Street Journal though, in the roaring 2000s, stocks had their worst calendar decade performance in 200 years. Investors would have done better almost anywhere else, including stuffing their cash under a mattress.

But, during that same period, gold prices (USD/OZ) skyrocketed, increasing by 532.15%. Obviously, the smart money was invested in gold.

Of course, if you had your money in Apple stock, you would have done pretty well. Apple has been a phenomenon. But so was IBM back in the early eighties when PCs first became popular. Everyone thought IBM was going to own the world. Look what happened to them. So there’s no guarantee Apple will continue its dominance.

Even some of the richest men in the world lost billions of dollars from 2000 to 2010 as a result of the global financial crisis, the dot-com crash and not-so-smart business choices.

Bill Gates, for example, lost $50 billion, more than the GDP of Guatemala. Ted Turner lost $1.8 billion, Kirk Kerkorian $3.0 billion, Charles Schwab $4.0 billion and Summer Redstone $6.7 billion. So it doesn’t necessarily pay to be on the inside.

Why Did Gold Outperform Stocks?

The reasons why gold has done so well are pretty obvious. Times have been bad and precious metals, especially gold, have always done well in hard times.

Global economies are slowing down. Some are coming to a standstill. The global debt crisis is at an emergency level, and too many governments have responded by printing more paper money to service their debt. Investors have responded by taking action to buy gold as a protection against losing the value of their cash as inflation looms in the future.

Another factor driving gold prices and bullion prices ever higher during the 2000s was inflation caused by an ever increasing global demand for crude oil while global production of oil was falling off. As more global economies became dependent on oil as an energy source, more investors turned to gold as a hedge against inflation and as a way to preserve their money,

What’s in the Future for Gold?

Most large economies have only three ways to service their enormous debt – reduce spending, raise taxes and/or print more money. They seem to be totally unwilling to reduce costs and believe raising taxes to be political suicide, so they’re left with only one option – putting more money into circulation.

Very few, if any, economists see prosperity in the future. That’s why buying gold remains a better investment than stocks now and in the future. Gold is always the best thing to have in your possession in an economic crisis.

Is Gold a Safe Investment?

March 27th, 2013 No comments

For the past ten years, gold has been an excellent investment, rising from about $300 an ounce in 2000 to over $1,600 an ounce today. That’s probably why a recent US poll showed most investors believe gold to be the best long term investment, ranking it better than real estate, stocks and savings accounts. Many Australians agree.

One of the reasons for gold’s strength as an investment is the present global debt crisis. As economies slow down, there’s been an increasing pressure to service debt. Governments all over the world have responded by increasing the money supply. The potential of future inflation has driven investors to buy gold to protect the value of their money. This trend doesn’t seem likely to change, making gold prices very stable.

Another factor making gold a safe investment is the rising price of oil and the resulting inflation caused by greater global demand for oil and dwindling global oil production. As more economies around the world become increasingly dependent on oil as a primary energy source, more investors will turn to buying gold and other precious metals as a hedge against rising inflation and the devaluing of paper currency.

Gold vs. Paper Money and Investments

Sure, there will always be a difference of opinion between economists, each offering the pros and cons of their particular point of view. But, in the long run, gold has always done very well, seldom losing its value and never given away for free.

You can’t say the same for paper money. Too many times in history, paper money had no purchasing power and was better used as fuel for the furnace or for wiping a baby’s bottom.

The same can be said about many paper stocks and investments. Companies and industries flourish and disappear, making their investments of little to no value.

In 1970,General Motors, Exxon Mobil, Ford Motors, General Electric and IBM were the five largest global companies. Not today. Only Exxon Mobil is still in the top five. The US retail phenomenon, Wal-Mart, is # 3. In 1970, it was only a small local chain store.  

General Motors is # 19 today, behind Toyota (# 10) and Volkswagen (# 12). Ford Motors, General Electric and IBM are not even in the top 20.

As you can see, investing in stocks can only be profitable if you can predict the future and know who the winners and losers are going to be.

That’s never been the case for gold. Buying and selling gold is easy. Gold is always in demand and even more so today as mining production is becoming scarcer and even more costly, keeping gold prices stable or on the rise.

Most market analysts believe gold and other precious metals will continue to do well in the future, as long the global economy remains unstable. Some are predicting gold prices will go as high $2,000 an ounce in the short term.

Five Common Precious Metal MYTHS

March 20th, 2013 No comments

Buying gold, silver bullion and other precious metals is one of the least understood investment options open to inexperienced investors.

When investors take the time to look at the facts about precious metals in the light of day, they soon discover that all of the old myths about buying and selling gold and other precious metals can’t stand up to the examination.

Let’s take a look at five of these common misconceptions about precious metals.

1. Gold and silver investing is only for wealthy high rollers.

You don’t need to be a millionaire to get started in buying gold or silver. Many average investors are putting up as little as one hundred to one thousand dollars to start their precious metals portfolio. So, with extra cash you may have on hand, you can begin to invest in rather inexpensive coins and silver bars. In fact, people from all levels of income are investing in gold and silver to protect themselves and their money in case of an emergency or disaster.

2. Precious metal investing is only for the experienced investor.

Many investors believe precious metal investing is too difficult to understand, but this is also far from true. Gold and silver are globally traded and information on the global demand and supply of these precious metals are not some closely held secret. Everything you need to know to be a smart investor is available anywhere in the world.

Actually, silver is one of the safest investments anyone can make. It’s virtually fool-proof. Whether you choose to invest in silver coins or silver bullion is up to you, but both hold their value extremely well, and both make an excellent investment.

3. Investing in gold is risky business.

Gold is actually one of the least risky investments you can make. Unlike paper investments, gold will never lose all its value. There will always be a demand for gold. Right now the demand for precious metals, such as gold, silver and platinum, is on the rise, while the supply from annual mine production is falling rapidly.

Another factor strengthening gold as an investment is the inflation caused by rising oil prices due to increased demand and declining production. Another trend in gold’s favour is the increase of money supply by the central banks, which causes a decline in the purchasing power of paper currency. All these factors make gold a safer investment.

4. Gold is not a very good investment.

When compared to recent major stock indices, gold’s performance may look weak, but that’s not necessarily true. Over the last ten years, gold has registered an average annual return of about 20 percent, which is certainly respectable. As far as the DOW is concerned, companies come and go. They perform poorly, go bankrupt and totally disappear and are then replaced on the DOW by newer, higher performing companies. Your money is safe in the stock market as long as you pick the winners and avoid the losers. Gold, on the other hand, may not make you get rich quick, but it’s value is not going to disappear overnight, as is the case in some publicly traded companies. Gold’s main purpose is as a wealth protector.

5. Precious metals are not a very good inflation hedge.

The truth is that since 1971, gold has steadily risen in price against fiat currencies when the global gold standard was abandoned. During that period of time, all of the world’s currencies have greatly depreciated in value when compared to gold. The purchasing power of the American dollar, for example, is only 20% of what it was in the early seventies. On the other hand, gold increased its purchasing power and will continue to do so as long as the central banks continue printing more money than the increase in the national GDP.

As far as precious metals are concerned, it pays to keep an open mind. Do your due diligence and explore the reality behind the myths and you will be surprised by how much value there is in precious metal investment, especially as a wealth preserver

The Best Ways to Store Your Physical Gold Holdings

January 21st, 2013 No comments
As your supply of physical gold continues to grow, you are going to want to make sure that you are prudent and wise as to where you store it. As you probably know, there are a few different options available and you may find that a combination of one or more will work best for you. Let’s look at the most common and most feasible options to ensure that you have considered them all.
Home Sweet Home
The thought of having physical gold safely stashed at home brings a sense of security and peace of mind to a lot of people. Others however, get nervous just at the very thought of it. We’ve all heard stories of burglaries and if a burglar did find your stash there would be no way to recover it. On the other hand, having a small supply of physical gold on hand could certainly come in handy in the event of an emergency. So it’s up to you as an individual to find that balance between risk and security.
If you do decide to buy gold and stash some at home, you obviously want to be very secretive about its location. Some considerations are: a concealed safe (preferably bolted into place), a false wall or secret cupboard, a food box in the freezer (also offers some protection from fire), a special can designed to look like a drink or food can, or even buried in your back yard. If you store your gold at home, you will obviously be the only one responsible for its safety – which can be a benefit or huge risk depending on your mindset.
Safety Deposit Boxes
One of the most obvious options for storing your physical gold is a safety deposit box at your bank. The advantage of this method is that it is simple and has less risk of burglary than your home does. However there are risks that you should be aware of. If the bank, for whatever reason, becomes insolvent, accessing your gold might become quite difficult. Even though the gold would remain your property, it could take a great deal of time before you have access to it again.
Bullion Dealers
Many bullion dealers and organisations will hold your physical gold in their vaults for a nominal fee.  This would provide much better security than storing it at home and would also make it easy to sell it back into the marketplace when the time comes. This also minimises the cost and risk of transportation from the dealer to your home.
Allocated or Unallocated Storage
Allocated storage means that your actual physical gold remains segregated from the gold belonging to other investors. Unallocated storage means that gold is purchased for you at an agreed upon spot price. You don’t actually own the gold but the purchase transaction serves as a promise to provide you with that amount of bullion when you request it. In essence you are an unsecured creditor with the institution with whom you are dealing. Obviously you want to do careful research before committing your physical gold holdings to someone else.
The nice thing about having some physical gold on hand is that no matter what might happen, it can always be used as a medium of exchange in the event of an emergency or catastrophic global event. So regardless of where you decide to store it, the main thing is to ensure that you do have a stash of physical gold securely tucked away, just in case.

As your supply of physical gold continues to grow, you are going to want to make sure that you are prudent and wise as to where you store it. As you probably know, there are a few different options available and you may find that a combination of one or more will work best for you. Let’s look at the most common and most feasible options to ensure that you have considered them all.

Home Sweet Home

The thought of having physical gold safely stashed at home brings a sense of security and peace of mind to a lot of people. Others however, get nervous just at the very thought of it. We’ve all heard stories of burglaries and if a burglar did find your stash there would be no way to recover it. On the other hand, having a small supply of physical gold on hand could certainly come in handy in the event of an emergency. So it’s up to you as an individual to find that balance between risk and security.

If you do decide to buy gold and stash some at home, you obviously want to be very secretive about its location. Some considerations are: a concealed safe (preferably bolted into place), a false wall or secret cupboard, a food box in the freezer (also offers some protection from fire), a special can designed to look like a drink or food can, or even buried in your back yard. If you store your gold at home, you will obviously be the only one responsible for its safety – which can be a benefit or huge risk depending on your mindset.

Safety Deposit Boxes

One of the most obvious options for storing your physical gold is a safety deposit box at your bank. The advantage of this method is that it is simple and has less risk of burglary than your home does. However there are risks that you should be aware of. If the bank, for whatever reason, becomes insolvent, accessing your gold might become quite difficult. Even though the gold would remain your property, it could take a great deal of time before you have access to it again.

Bullion Dealers

Many bullion dealers and organisations will hold your physical gold in their vaults for a nominal fee.  This would provide much better security than storing it at home and would also make it easy to sell it back into the marketplace when the time comes. This also minimises the cost and risk of transportation from the dealer to your home.

Allocated or Unallocated Storage

Allocated storage means that your actual physical gold remains segregated from the gold belonging to other investors. Unallocated storage means that gold is purchased for you at an agreed upon spot price. You don’t actually own the gold but the purchase transaction serves as a promise to provide you with that amount of bullion when you request it. In essence you are an unsecured creditor with the institution with whom you are dealing. Obviously you want to do careful research before committing your physical gold holdings to someone else.

The nice thing about having some physical gold on hand is that no matter what might happen, it can always be used as a medium of exchange in the event of an emergency or catastrophic global event. So regardless of where you decide to store it, the main thing is to ensure that you do have a stash of physical gold securely tucked away, just in case.

The Bubble: Interviewing Peter Schiff

November 26th, 2012 No comments

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

Common Myths about Gold Investment

November 15th, 2012 No comments

Few investments attract more myths and folklore than gold. With gold long considered valuable, it’s been the subject of legends and tall tales for hundreds of years. Let’s take a look at some of the myths around gold that are still alive today and examine whether they’re busted.

Gold is Overvalued

For the past several years, this is probably the most heavily and hotly debated discussion around gold. The fact of the matter is that no one knows. For that matter, no one even knows what it is truly worth other than what it is currently trading for. Beyond that it is a fruitless discussion, but a popular one nonetheless.

The Smart Money Exited Gold Long Ago

People have been claiming this for over five years now. But the fact remains that some of the largest and most successful investors in the world have their portfolios diversified with a strong gold position.

Gold is a Safe Haven

Between 1980 and 2000, the purchasing power of gold dropped dramatically. Since then it has enjoyed incredible growth other than during the crash of 2008 when it fell by nearly a third. Of course, many investors would argue that its safety lies in the long position and that the relative volatility can be ridden out.

ETFs Are More Profitable Than Physical Gold

ETFs are sometimes more profitable but sometimes less so. It really depends upon when you buy and sell and what price you pay. During the crash of 2008, ETFs dropped even more than the metal did. ETFs are also usually considered more risky than physical gold and it’s often argued that more “paper” gold is sold than exists physically.

Gold is a Better Investment than the Other Precious Metals

Historically, over the long haul, silver and platinum have marched pretty much in step with gold. At various times both metals have outperformed gold, and at other times gold has excelled. At different times, one precious metal has risen much more than another. Timing and investment strategy make a big difference, no matter what you are in investing in. Speak to a specialist if you are unsure, and pay attention to market trends.

Physical Gold is Subject to Confiscation

This myth is perpetrated by unscrupulous dealers that want naive investors to invest in older gold coins with higher premiums. It is based on a time during the Great Depression, when U.S. President Roosevelt required all gold, except older coins, to be turned in. The older coins received special treatment due to their value as collectibles. The fact is that there is absolutely no evidence that any government has any plans of this nature or could even conceivably pull off such a dramatic feat.

Gold Should Comprise 7% to 10% of Your Portfolio

Why only 7% to 10%? Think about it. If the other 90% of your portfolio collapses, the 10% that your holding in gold isn’t going to make up the difference even if it doubles in value.

If you really want to know the truth about gold, rather than listening to myths perpetrated on the internet or by friends or family, you’re better off consulting with a reputable and professional company that has been dealing in gold for many years.

Buying Bullion Bars or Coins: Which is the Better Investment?

November 8th, 2012 No comments

Many investors have decided that it is safer to have precious metal in hand than it is to invest in precious metals Exchange Traded Funds (ETFs). Granted, the cheapest and most convenient way to invest in and trade with gold and silver is ETFs, but they also come with more long-term risks. Risks such as, but not limited to, counter party risk, which means that the precious metal is not actually held by the ETF provider. It’s typically held by a large bank and if the bank goes bust, your investment could disappear as well.

Besides, how do you know they’re actually holding the precious metals that they claim to be holding? Along with this are the U.S. Commodity Futures Trading Commission and the Gold Anti-Trust Action Committee that reported that the actual physical gold that exists globally above ground is only 1% of the ‘paper gold’ that is being traded.

The Shiny Stuff

Buying physical gold and silver is undoubtedly more expensive than purchasing ETFs. First you have the dealer’s premium that you will incur when you buy it. You will also have to factor in delivery, storage and even insurance costs. Then when you sell, there is typically a dealer fee as well. Of course, buying and selling gold and silver is also not without risks either.  Gold and silver prices could drop through the floor resulting in a loss on an asset that may not be easy to sell. However, when you look at current market conditions and global economic trends, investing in physical precious metals definitely warrants close consideration. So what form of precious metal do you buy? Bullion and coins each have their own merits and drawbacks and both should be assessed as to how they fit your unique needs and investment strategy.

Coins

Coins can be quite elaborate and attractive and easy to purchase in small amounts. Since they are something with which most of us are familiar, they can also be a little less intimidating than bullion, at least at first. Some coins are rare and collectible which can add even more complexity to the investment. It should be noted that the added value of being a collectible is often in the eye of the beholder. Collectible and antique coins are very specialised markets and should probably be avoided unless you really know what you are doing. Collecting coins can be fun and rewarding but for true investors, most would agree that bullion is a wiser choice.

Bullion

Precious metal investors focus purely on the metal value rather than getting caught up in collectible values. Bullion is easy to sell, hard to fake, and is typically more pure than coinage and the premium is generally lower as well. For the serious investor, gold bars are the simplest and most efficient way to invest in precious metals. Larger bars are generally available for the lowest premiums over their intrinsic metal value. The trade-off is that they are not quite as flexible as smaller bullion portions when it comes time to sell.

Even though most investors would agree that bullion bars make the most sense, like most things, investment strategy is an individual pursuit and only you can determine what’s best for you.