{"id":149144,"date":"2019-06-06T14:21:34","date_gmt":"2019-06-06T18:21:34","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=149144"},"modified":"2019-06-06T13:21:55","modified_gmt":"2019-06-06T17:21:55","slug":"5-big-lies-about-precious-metals-investing-exposed","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/06\/5-big-lies-about-precious-metals-investing-exposed\/","title":{"rendered":"5 Big Lies About Precious Metals Investing Exposed"},"content":{"rendered":"
June 6, 2019<\/div>
\r\n<\/div><\/div>

By Money Metals News Service<\/b><\/p>\n

Physical precious metals serve a unique role in an investment portfolio. Unlike stocks and bonds, gold and silver coins can be held entirely outside of the financial system. They carry zero counterparty risk. They are the ultimate \u201cbuy and hold\u201d safe-haven assets.<\/p>\n

Unfortunately, investors must often navigate through a barrage of fake news, myths, misinformation, and fraudulent pitches surrounding precious metals before arriving at the simple truth.<\/p>\n

Investing in metals isn\u2019t complicated; nor are the reasons for doing so. Gold and silver are hard money with centuries\u2019 long track records.<\/p>\n

You don\u2019t buy bullion to get rich quick. You buy it to preserve wealth over time against the threats of currency depreciation and financial crisis. Opting for common, low-premium bullion products that sell close to spot prices is the most efficient way to invest.<\/p>\n

That\u2019s precious metals investing in a nutshell.\u00a0 But if you listen to financial and monetary establishment mouthpieces, you\u2019ll likely be misled.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Lie #1: Gold Isn\u2019t Money<\/strong><\/p>\n

Neither brokers, bankers, nor central bankers particularly want the investing public to view precious metals as a core holding. They prefer we think of gold as a \u201cbarbarous relic\u201d of the past that no longer serves as money.<\/p>\n

In an infamous exchange in 2011 between then Federal Reserve Chairman Ben Bernanke and pro-gold Congressman Ron Paul, Bernanke stated flatly that gold is \u201cnot money.\u201d\u00a0 This is the big lie of fiat money pushers and their ideological allies.<\/p>\n

It flies not only in the face of history, but also of the fact that central bankers themselves continue to hold and accumulate gold as monetary reserves.\u00a0 In 2018, central banks around the world, led by Russia and China, added hundreds of tons of gold to their reserves.\u00a0 In the first quarter of 2019, Russia boosted its pace of gold buying by a whopping 68%.<\/p>\n

Gold isn\u2019t a \u201cbarbarous relic\u201d to major world powers seeking to divest themselves from U.S. dollars and insulate themselves from perceived threats out of Washington, D.C.<\/p>\n

Lie #2: Silver Isn\u2019t Money<\/strong><\/p>\n

Some misinformers will concede that gold is money\u2026 but claim silver isn\u2019t.<\/p>\n

The Founding Fathers of the United States would disagree strongly.\u00a0 They originally defined a \u201cdollar\u201d in terms of grains of silver (Coinage Act of 1792) which simply codified what was nearly universally in practice.<\/p>\n

Specifically, a dollar was to be 371.25 grains (equivalent to about three-fourths of an ounce) of silver, in harmony with the Spanish milled dollar.\u00a0 Thus, the true foundation for U.S. circulating currency was silver.<\/p>\n

On Wednesday, the central bank\u2019s \u201cOpen Market Committee\u201d released the minutes from its March meeting.\u00a0 Participants decided the Fed will soon stop selling Treasuries and other paper assets on its $4 trillion balance sheet and stand pat on rates.<\/p>\n

It\u2019s true that silver has since been\u00a0removed from circulating coins<\/a>and replaced with cheaper metals.\u00a0 It\u2019s also true that silver generally isn\u2019t held in monetary reserves by central banks.<\/p>\n

Silver, however, remains the go-to tangible money of the masses.\u00a0 In the event of a currency collapse that causes the public to ditch fiat dollars, silver is more likely than gold to be used as barter money in everyday transactions.<\/p>\n

Lie #3: Precious Metals Are Too Risky for the Typical Investor<\/strong><\/p>\n

This lie is propagated by Wall Street and by Main Street financial advisors who have bought into anti-gold propaganda.\u00a0 Their conflict of interest is obvious.\u00a0 The financial industry loses out on commissions and fees when investors park wealth in hard assets.\u00a0 So they portray gold and silver as \u201cexotic\u201d and \u201crisky\u201d investments.<\/p>\n

Or, as in a recent documentary financed and distributed by\u00a0The Financial Times<\/em>, they deride gold as \u201cshiny poo<\/a>.\u201d<\/p>\n

It would indeed be risky to bet everything on gold and silver. But no responsible voices in the precious metals community advocate that for the typical investor.\u00a0 Instead, they advocate a prudent allocation to the precious metals sector \u2013 from around 10%, perhaps up to 25% of a portfolio.<\/p>\n

A study by Ibbotson Associates found that investors who put 7.1% to 15.7% of their portfolios in precious metals enjoy superior risk-adjusted returns.\u00a0 Gold shows virtually no correlation to stocks and bonds, meaning it can rise when paper assets fall.<\/p>\n

Yet the average investor has nowhere near even the bare minimum suggested by Ibbotson Associates to hedge against risks in financial assets.<\/p>\n

When the stock market crashed in 2002, precious metals shined.\u00a0 When the financial sector melted down in 2008, gold finished the year with a modest gain. \u00a0When the U.S. suffers a debt-driven currency crisis, as many economic forecasters think is inevitable, the biggest risk of all will be not having adequate exposure to precious metals.<\/p>\n

Lie #4: Cryptocurrency Is More Valuable Than Hard Currency<\/strong><\/p>\n

The crypto coin craze has spawned a number of misconceptions, such as the notion that Bitcoin is \u201cdigital gold.\u201d\u00a0 Whatever their merits (and there are certainly some), cryptocurrencies backed only by digits cannot be equated to gold and will never replace it.<\/p>\n

Unfortunately, some cryptocurrency promoters are trying to sell their digital storylines by bashing gold.<\/p>\n

Grayscale Investments, which runs an exchange-traded Bitcoin product, recently launched a \u201cdrop gold<\/a>\u201d campaign.\u00a0 It even produced an anti-gold TV commercial, portraying gold buyers as \u201cliving in the past\u201d and out of step with the \u201cdigital world.\u201d\u00a0 The commercial\u2019s narrator states, \u201cDigital currencies like Bitcoin are the future\u2026.and unlike gold, they actually have utility.\u201d<\/p>\n

The lie that gold lacks utility is an old one propagated by the financial establishment.\u00a0 It\u2019s now being regurgitated by overzealous Bitcoin bugs.<\/p>\n

The truth is that gold came to be recognized as money precisely because it has utility outside of monetary use.\u00a0 Gold is useful not just to jewelers and artisans, but also to rocket scientists in space technology applications.<\/p>\n

What exactly would a Bitcoin be useful for outside of its own digital ecosystem?\u00a0 Nothing.<\/p>\n

Cryptocurrency enthusiast James Altucher went so far as to claim in a recent\u00a0interview<\/a>, \u201cGold is just a rock. Bitcoin has real value.\u201d<\/p>\n

Cryptos certainly have a roll to play, and, in fact, Money Metals Exchange is leader in offering customers the ability to using\u00a0digital currencies when buying or selling<\/a>\u00a0the monetary metals.<\/p>\n

But here\u2019s a reality check: Bitcoin has market value, which can be fleeting. Bitcoin might be worthless 100 years from now if new technologies supplant it.\u00a0 Gold\u2019s value, on the other hand, is real, immutable, and eternal. Its unique physical properties combined with its rarity ensure it will always be worth something substantial.<\/p>\n

Lie #5: \u201cCollectible\u201d Coins Are Better Investments than Bullion Coins<\/strong><\/p>\n

Sadly, some of the\u00a0misinformation<\/a>\u00a0being spread about gold and silver investing comes from bad actors within the precious metals industry.<\/p>\n

The biggest culprits are\u00a0numismatic coin promoters<\/a>\u00a0who try to trick people into paying huge markups for supposedly \u201crare\u201d or \u201ccollectible\u201d coins.\u00a0 High-pressure salesmen will sometimes pitch nonsense about numismatics being \u201cconfiscation proof\u201d or fantasies about how they\u2019ll appreciate more than ordinary coins.<\/p>\n

They almost certainly won\u2019t after factoring in bid\/ask spreads. \u00a0The truth is that these high-premium and relatively illiquid products are suitable only for those with a particular interest in, and knowledge of, numismatics.<\/p>\n

For the vast majority of precious metals investors who are simply looking to acquire ounces of gold and silver, common, low-premium bullion products are better investments.<\/p>\n

 <\/p>\n

 <\/p>\n

\n

The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Money Metals News Service Physical precious metals serve a unique role in an investment portfolio. Unlike stocks and bonds, gold and silver coins can be held entirely outside of the financial system. They carry zero counterparty risk. They are the ultimate \u201cbuy and hold\u201d safe-haven assets. Unfortunately, investors must often navigate through a barrage […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-149144","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/149144","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=149144"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/149144\/revisions"}],"predecessor-version":[{"id":149146,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/149144\/revisions\/149146"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=149144"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=149144"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=149144"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}