Thanks to market volatility,
societal strife at home and abroad,
many people are turning to an age old investment
that's supposedly rock solid.
That's right.
Gold.
Now, you may have seen an ad like this,
one or a thousand times, on cable TV.
That's why I'm gonna do two things.
Support our military and buy gold from Rosland Capital.
You need to protect yourself in today's economy.
When people start talking to you
about the advantages of buying gold,
you might rightfully suspect
that they're trying to sell you some gold,
but what we're really here to find out is,
is gold a good investment
and should I buy it off an ad on TV?
To tell the whole story of gold, we gotta go way back.
Humanity's love affair with gold dates back many millennia
and is unique in its globe spanning popularity.
Both the Inca and Egyptian empires,
two societies that never knew about each other,
believed it to be from the bodies of the gods themselves.
But for most of its history, up until very recently,
there was no concept of gold
as something with a fluctuating price,
or an investment.
Gold didn't cost money,
it was money.
Then something changed.
Well, even now gold, a lot of people would say,
doesn't have any return.
There is no interest paid on gold.
There's no coupon, there's no dividend.
In a sense it has a return in that the price can go up,
but the price can go down as well.
But through most of history, that was not the case.
It was an asset with no risk.
It was exchanged at a fixed price to the currency.
So there was no risk in that asset,
but there was no return either.
And that's the historic reason for investing in gold
up until the 1970s,
when of course Richard Nixon takes the U.S. dollar
off the gold standard,
gold overnight goes from $35 to many times that amount,
but the capital gain that you got on gold,
if you'd bought it in 1972 and held to 1980
was one of the great rallies in history.
But if you think about what's changed to the previous thing,
previously it was a instrument with no risk and no return.
Now it's got a stupendous return,
but it's also got a substantial risk,
because if you then bought it in 1980,
the price slid through the eighties
and continued to slide and slide and slide,
until I think it was under $500 an ounce.
So should people be investing in gold?
One good reason why you probably do want to hold
a little bit of gold in your portfolio,
which is that it behaves differently
to everything else that you've got, pretty much.
If the stock market crashes,
when people sell their stocks
and squeeze out of that,
some that will go into cash,
but some of it will go into gold,
and you only need a very small amount
of that investment to push into gold
to really push the price up quite substantially.
And how much gold should one person have?
A lot of investment advisors would say that
you should have gold at about, say 2% or so,
of your overall portfolio.
All right.
I wanna buy some gold.
How do I do it easily?
My personal advice would be then,
you may as well just go the simplest method
and trust that it'll prove okay,
and at the moment, I would say that's probably an ETF.
ETFs, like the SPDR Gold Trust,
ticker symbol GLD, offers shares backed
by physical gold bars in bank vaults around the world,
and those shares trade just like stocks.
Now I could invest in an ETF that goes up or down
with the price of gold,
but heck gold looks cool.
I wanna hold it in my hand.
What's the easiest way for someone to buy physical gold?
If you're in the United States,
the easiest way for most investors
to get into physical gold,
that means owning a piece of gold,
is to buy gold bullion coins.
What many Americans might not be aware of
is the United States Government in 1986,
authorized the Mint to start making
American gold bullion coins,
and I have a sample here.
So this is what it looks like.
Let me bring it up to the camera.
It's a little bright, there it is.
So, this is a one ounce gold coin.
It's called the American Eagle Gold.
It is the most popular gold bullion coin in the world,
outstripping the Krugerrand.
The Mint doesn't have the ability
to create a two-way market.
So, what they end up doing, is they sell it
to a group of, what we call authorized purchasers,
which guarantee to buy the gold back
if you wanna sell it back
at whatever the market price is.
So, all you have to do is go right to the Mint website
and it'll list the authorized purchasers.
And those authorized purchasers
not only sell that directly to individuals,
but they also sell it as a wholesaler to other retailers.
It should be mentioned that the U.S. Mint
isn't the only name in the game
when it comes to gold coins.
Mints around the world offer coins
for investment or collection.
But before I finish up with Ed,
I had to ask one question, "What does Fort Knox look like?"
I could tell you, but I'd have to kill you Henry.
You can't talk gold
without talking about Fort Knox.
The United States bullion depository
is the single largest gold vault in the world,
and it hasn't been open to the media since 1974.
Here, they do a routine job routinely,
and what glamor there is comes from what they're guarding,
a vast amount of gold.
Inside its walls
sit more than 147 million ounces of gold.
There's a lot of gold at Fort Knox.
You have never seen as much gold as there is in Fort Knox,
'cause the United States has the largest gold reserves
in the world, by a factor of three.
It's incredible to be around that much gold
in such a small space.
Take a look at YouTube and you'll see no shortage
of collectors, or as they call themselves, stackers,
who keep their precious metals on site.
Why do they do it?
I talked with the owner of the account Silver Bean Counter,
to find out.
He wasn't willing to show his face,
but you'd probably value your privacy too
if you had tens of thousands of dollars
of gold coins in your house.
This is a 1924 American Gold Eagle right here.
This is a South African Krugerrand.
Australian kangaroo, yes.
You know, the big reasons people purchase precious metals
in the first place is it's really untraceable,
very common.
Governments, businesses don't know that you have it,
so it's a good way to store wealth in a very private way.
I keep it all in a spreadsheet,
so I have a running total.
I know exactly what I spent on something, when I bought it,
what the spot price of the precious metal was at the time,
whether or not it's gold or silver,
and then of course the current value of it.
I track that as well.
Stacking is basically purchasing of precious metals
on a regular basis,
whether or not you do it weekly, with each paycheck,
or monthly, you've got a budget
that you set for yourself and you just buy.
The old stacker mentality is
if you don't hold it, you don't own it,
and that's why people don't like ETFs,
or stackers don't like ETFs.
I almost forgot.
I never answered the question that I asked up top.
And should I buy it off an ad on TV?
No.
Just no.
No to TV ad bullion dealers.
I would take a look at whoever is doing that ad
and do research on the company first.
Keep in mind, all that glitters isn't,
well, you get the idea.