The dollar is continuously devaluing; today the dollar is worth less than 10% of what it was worth 75 years ago. With the uncertainty of the economy everyone needs an asset to offset the loss of the purchasing power of the fiat dollar. Precious metals are great hedge against inflation and deflation of the dollar. In today’s challenging economic environment many are concerned not only about the economy, but about unemployment, natural disasters and future inflation. These all may be good reasons to consider acquiring gold. The information below will help define it more clearly.
Gold and silver offer the opportunity to diversify with a hard asset that has historical significance, intrinsic value and metallic content. It’s obvious having a diversified portfolio makes sense. Having a mix of assets may help spread out your risk. Quite simply, it’s not prudent to have all your eggs in one basket. That’s why adding assets such as gold and silver to your portfolio is a common diversification strategy.
Gold and silver are commonly referred to as a “safe haven” asset. It has survived inflation, deflation, fiat currencies, financial crises and natural calamities. For centuries, owning this metal has provided intrinsic value and helped assure a measure of wealth for future generations.
Many choose to own gold and silver because they view it as a potential hedge against the weakening dollar. As we look upon unprecedented government spending, high unemployment and the potential for future inflation-some analysts are saying gold offers protection against the possibility of a declining dollar.
Over the past decade, gold prices are up over 500% and silver up over 1000%! Though, past performance cannot guarantee future results, some financial experts believe today’s uncertain economic climate could contribute to a further rise in prices and even possibly reach new record highs.
PRIDE OF OWNERSHIP
Unlike paper, gold and silver are physical, tangible assets. It has a measurable intrinsic value. You can own and collect gold and silver. Some coins have unique and interesting histories, which also add collectible value to them. Coins and precious metals are among the few tangible assets that can be easily transported, sold or traded worldwide.
Since 1895, there have been twelve stock market corrections that equaled or exceeded 40%. Forty percent! These corrections, also known as downturns or crashes, can easily turn each $1,000 of your life savings into $600 or much less, depending upon the severity of the fall in prices.
Since 1895, there have been three times when the Dow-to-gold ratio has been above 18 to one. This means it would take 18 ounces of gold to “buy” the Dow. The first time was in 1929, when the ratio was 18.4 to one, just before the most catastrophic crash in history. The second time was in the mid- 1960s, when the ratio reached an unprecedented 28.26 to one. Within 14 years, the ratio had fallen to 1.04 to one! The third time was 1999, when the Dow-to-gold ratio surpassed 31 to one! Can there possibly be a clearer signal that it’s time to include gold in your financial portfolio?
Since 1983 the Industry Council for Tangible Assets (ICTA) has been the national trade association for all who have an interest in precious metals, rare coins, U.S. and foreign currency, and other numismatic and tangible assets. All current information can be found at their web site: www.ictaonline.org