Gold: a hedge against the dangers of interesting times

John Christensen – While real estate and paper investments are vulnerable to the effects of changing times, gold is skyrocketing. An investment in precious metals can save a portfolio when all else fails.

The old Chinese curse, “May you live in interesting times,” has particular relevance to the present time in American history. There is a lot going on right now, a lot of it scary. Major investors around the world are responding to the events of our dangerous times by plunging their dollars, German marks, and yen into gold, silver, and palladium; Bill Gates, Warren Buffet, and billionaire speculator George Soros, to name just a few. Large financial institutions such as the Central Banks of Russia and China are also jumping on the metal bandwagon, driving the price of these precious commodities more and more.

This is causing a gold rush not seen since the Misery Index years of the 1970s. Gold in particular is now seen by many financial experts as an island of stability in a paper-based investment market that is becoming increasingly stormy, a development that bodes well for ordinary folks who want to shore up their retirement accounts with a precious metal hedge.

“People around the world are losing faith in politicians and currencies,” says Marc Lubaszka, president / CEO of World Financial, a highly successful investment firm specializing in precious metals based in Studio City, California. “This has resulted in a flight to gold and other precious metals, a store of value for more than five thousand years. Investors are taking their money out of paper assets and putting it where it is likely to perform better in times of decline. uncertainty”. . “

Unreliable old reliable

Investments that were once considered as stable as granite are rapidly losing ground, Lubaszka explains. Real estate is just one example. Long considered a hit by money gurus, buying a home is no longer seen as a smooth path to profit. Stratospheric prices and higher interest rates are putting intolerable pressure on the current housing bubble, factors that are sure to burst the foam sooner or later and lead the overheated housing market to freeze.

“The housing bubble will burst rather than gradually deflate, following the rapid and violent pattern of decline of almost all financial bubbles throughout history,” says Lubaszka. “Higher interest rates have a negative impact not only on the health of the housing market, but also on other economic segments. The stock market is affected because higher rates make it more expensive for companies to pay. Debt. Higher rates hurt corporate profit margins and lower equities value, bad news given the deep debt situation many companies find themselves in today. “

The paper is past

According to Lubaszka, the US dollar has lost more than 80% of its original value since the early 1970s, when we switched to a floating currency, a situation that did not help much with the debut of the euro in the late 1990s. Unlike the US dollar , a portion of the euro is backed by gold, a stability feature that has helped it outperform the dollar in the long run. It is for this reason that many foreign investors have been taking money out of US dollars to invest in gold and oil, an explanation for why the price of both has continued to rise in recent months.

“Gold prices are rising right now because the Federal Reserve is printing dollars in flood ratios to keep the housing market afloat,” adds Richard Russell, editor of Dow Theory Letters, a report on stock market trends and values. published since 1946. “This is creating inflation, which erodes purchasing power. All the world’s central banks are inflating right now, reducing confidence in paper globally and encouraging the purchase of gold. India and China are also boosting Gold prices. India is the world’s largest consumer of gold, and the Chinese government is actively encouraging its citizens to buy gold. “

These are all very encouraging signs for investors in gold. Over the past 35 years, the value of gold has risen from a modest $ 35 an ounce to nearly $ 600. Compare that to the battered US dollar, a currency that is currently worth only 20% of its value in 1970.

“When gold peaked in the 1970s, interest rates were at an all-time high,” says Lubaszka. “Right now we are waiting to feel the effects of the last 9 interest rate hikes, which generally take 6 to 9 months to start affecting the economy. Now is the time to buy gold because when rates go up, it is exerted Downward pressure on real estate, stocks, bonds, and commodities like gold tend to rise. The opposite occurs when rates travel from a high to a low. That is the time to reduce gold assets and increase the paper part of a portfolio. “

Buy without getting burned

Michelle Henderson, owner of a talent agency in Los Angeles, California. understand what is at stake when it comes to investing. “As an agent, I work in a commission-based world and I have to invest in both people and ideas all the time,” he says. “Although I had had bad experiences with investing in stocks in the past, I knew that eventually I would find something that would work for me. I invested in a diversified portfolio of metals made up of palladium, silver and gold, and made a 38% profit on the palladium alone. By concentrating on making money and following World Financials’ advice, I was able to safely outperform and significantly increase the overall value of my assets safely. “

Lubaszka explains: “It’s probably best for first-time investors to start conservatively by buying physical metals rather than gold stocks, which can be very volatile.” According to Clearwater, Florida talk show host and gold analyst Tom O’Brien, when metals gain 20%, gold shares rise 50 to 60 percent. That’s great when it happens, but the reverse can also happen.

Buy gold bars or coins and put them in a safe deposit box. If you choose to buy coins from a coin shop, make sure you pay the lowest price possible and that they have a buyback policy. If you choose to go with a broker, the fees will be unavoidable because you are buying a tangible product.

There are corridors and then there are corridors. The best of the breed will answer all questions and make the first time gold buying process less stressful. Great brokers can also be accessed when needed, and can be quickly called in with any new information that affects the value of the investment.

Working with established companies, five years in business is good, ten even better. Don’t bother with companies that harass you with telemarketing offers or use high-pressure sales tactics. Avoid paying high commissions as well. Some brokers have fee tiers, through which they earn more money than investing on behalf of clients. There are also companies that will not buy metal again. Stay away from them too.

“Check the Better Business Bureau references and ratings,” adds Lubaszka. “Deal with a company that has an active interest in doing business with you. World Financial, for example, offers a five-star customer satisfaction guarantee. If questions are not answered or if we do not respond to the call or email From a potential client within 24 hours, that person receives a one-ounce American Eagle silver coin at no charge. The job of a financial advisor is to facilitate the investment process and make sure clients get the most out of their money. Good advisers are just good, but the best ones are worth it. Weight in gold. “

To contact World Financial directly call 818.264.4085. World Financial is the premier provider of precious metals to investors nationwide. In addition to offering numerous incentive programs, World Financial offers its clients the right type of precious metal strategy for each investor’s needs. They are located at 12198 Ventura Blvd Ste 200, Studio City

http://worldfinancialdaily.com/