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A Year For Accumulation Report

Uncertainty in the Markets

Gold Price Chart
Gold 5-Year Closing Price Chart

Nowhere is change more prevalent and pronounced than in the world's financial markets. Prices on stock and bond markets, and on currency and commodity exchanges, can and do change throughout each trading day. Periodically, these changes are quite dramatic, resulting from volatile and unpredictable market conditions. At such times, a diversified investment portfolio may help protect an investor from the full effect of unanticipated and potentially disastrous market movements such as a stock market crash.

A Question of Value Investing

Many experts believe that the stock markets, and the mutual funds that invest in them, are overvalued and potentially at risk for correction similar to the corrections seen in 1929, 1987, 2000 and 2008. Every stock market investor should consider balancing his market risk with real precious metals and not just gold stocks, which like all stocks, are subject to business risk as well as market risk (and can be extremely volatile at times). Historically, physical gold has been a premier and desirable financial asset in times of market turmoil. Precious metals are one of the only financial asset classes in an investment portfolio that are not simultaneously someone else's liability.

The Prospect of Inflation

In an attempt to avoid a recession, the U.S. government has been forced to inflate the U.S. economy with an easy monetary policy and increased spending. Precious metals can offer inflation protection and profit opportunity, as evidenced by the skyrocketing precious metal prices in the late 1970s when inflation reached double-digit rates.

Silver Price Chart
Silver 5-Year Closing Price Chart
Government Debt May Also Spur Inflation

Despite political jawboning, our colossal national debt has continued to snowball and is now rapidly approaching $20 trillion. Interest payments on this debt now drain the budget of billions of dollars each month. If history provides any guidance, this escalating debt could lead to a new wave of inflation, particularly if the government prints money to pay it off.

Wealth Protection in the 21st Century

Many investors are growing increasingly nervous about what they see in the world today: Increasing levels of domestic and international strife, war and terrorism; the declining value of the U.S. Dollar eating away at their nest eggs and their futures; stock, bond and real estate markets that appear chronically overvalued; and the very real possibilities of inflation, deflation, recession, depression and tougher times ahead.

Platinum Price Chart
Platinum 5-Year Closing Price Chart

In such an uncertain environment, it is natural—and highly appropriate—to seek out strategic investment alternatives in order to 1) preserve one's wealth; and, ideally, to 2) increase one's wealth. For thousands of years, in good times and bad, precious metals have offered investors a solid, long-term and tangible way to hold and protect wealth with relative safety. Unlike paper investments (like stocks, bonds and currencies) that can and have become worthless overnight, precious metals have true intrinsic value...and, hence, will always be valuable.

What's more, in recent years, precious metals have also proven to be outstanding short-term trading vehicles, offering traders periods of outstanding profit potential as metals prices fluctuate, sometimes dramatically, on world markets.