Home >Documents >Important Reasons Why You Should Own Physical Gold And Silver Today

Important Reasons Why You Should Own Physical Gold And Silver Today

Date post:16-Jan-2017
View:24 times
Download:0 times
Share this document with a friend


    Gold and silver both constitute good money, and they have each endured as inherently valuable assets over the last 5,000 years. They: Do not deteriorate over time. Are both easy to own, buy and sell. Are readily exchangeable and convertible worldwide. Protect against ongoing inflation and currency devaluation. Are crucial for diversifying your savings & investment portfolio.

    GOLD There are many compelling reasons for you to own physical gold - and to own it today: Inherent Value Gold is a foundation asset within any long-term savings or investment portfolio. For centuries, particularly during times of financial stress and the resulting 'flight to quality', investors have sought to protect their capital in assets that offer safer stores of value. A potent wealth preserver, golds stability remains as compelling as ever for todays investor. As one of the few financial assets that do not rely on an issuer's promise to pay, gold offers refuge from widespread default risk and also offers investors insurance against extreme movements in the value of other asset classes. Unlike paper currency or coins, gold has maintained its value throughout the ages. Convertibility Gold bullion bars can easily be converted to cash, prices are widely quoted, and the bars are internationally negotiable. Gold bullion bars are the least expensive way for you to own gold. Portfolio Diversification Investment portfolios primarily hold traditional financial assets such as stocks and bonds, but the key to diversification is finding investments that are not closely correlated to one another. Historically, gold has had a negative correlation to stocks and other financial instruments, and recent history bears this out. Diversifying your portfolio offers added protection against fluctuations in the value of any single asset or group of assets. Risk factors that may affect the gold price are quite different in nature from those that affect other assets. Statistically, portfolios containing gold are generally more robust and less volatile than those that do not. Inflation Hedge Historically, gold has proven to be an excellent hedge against inflation. Market cycles come and go, but over the long term, gold retains its purchasing power. Golds value, in terms of the real goods and services that it can buy, has remained remarkably stable for centuries.

  • By contrast, the purchasing power of most currencies has generally declined, due for the most part to the rising price of goods and services. Investors often rely on gold to counter the effects of inflation and currency fluctuations. Remember that inflation - as famously stated by President Ronald Reagan - is really a tax, an especially insidious hidden tax which constantly eats away at the value of every dollar you own. Deflation Hedge Deflation - a period in which prices rise, business activity slows and the economy is burdened by excessive debt has not been seen globally since The Great Depression of the 1930s. During that time, the relative purchasing power of gold soared, while other prices dropped sharply.

    Currency Hedge Gold is a hedge against currency fluctuations, particularly the U.S. Dollar. If the dollar appreciates, the gold price generally falls. But a fall in the dollar relative to the other main currencies produces a rise in the gold price. For this reason, gold has consistently proved to be one of the most effective assets in protecting against U.S. Dollar weakness. Gold is also a time-tested hedge against rampant and pervasive government orchestrated fiat currency devaluation. The U.S. Dollar has declined in value 98% over the last hundred years, and the decline continues because of our vast national budget, mounting trade deficits and a huge increase in the money supply. Also, the dollar is steadily losing its status as the Worlds Reserve Currency.

    Risk Management Gold is significantly less volatile than most commodities and many equity indices, tending to behave more like a currency. Assets with low volatility help reduce overall risk in your portfolio, adding a beneficial effect on expected returns. Gold also helps manage risk more effectively by protecting against infrequent or unlikely (but consequential) negative events, often referred to as tail risks. Generational Wealth Transfer Physical gold is a wonderful way to pass on and preserve wealth from one generation to the next; in fact, there is no better way! Supply & Demand The price of gold tracks the shifting balance of supply and demand. Since the 1990s, much of the supply of gold in the market has come from the sale of gold bullion from the vaults of global central banks. Meanwhile, new gold production from mines has been declining since 2000. As a general rule, a reduction in the supply of gold increases the price of gold. Long lead times in gold mining mean that production of gold is relatively inelastic, regardless of increases in demand. That is why the rally in the gold price since 2001 has not engendered a meaningful increase in gold production levels. Demand for gold has shown sustained growth recently, due at least in part to rising income levels in key markets. These supply and demand factors have laid the foundation for golds positive outlook. Increasing Demand Emerging market economies like China and India are boosting the demand for gold. Demand for gold has also grown among investors, with an increasing number of individuals and institutions seeing gold as an important investment class.

  • Geopolitical Uncertainty Gold tends to retain its value during times of geopolitical as well as financial uncertainty. It is often called the crisis commodity, because people flee to its relative safety when world tensions rise. During such times, gold often out-performs other investments. When confidence in governments is low, the gold price usually tends to rise. Ease of Ownership At Anthem Vault, owning gold bullion is inexpensive, easy and convenient. Our dealers margin* (exchange spread) for buying bullion is minimal, and there is no charge for selling. As the owner of the actual physical metal, you have direct control of your valuable asset. ________________________________________________________________________________ SILVER There are many compelling reasons for you to own physical silver - and to own it today: Silver Is Good Money Like its gold counterpart, silver is also good money. Central banks do not hold silver - only gold - because they have no control over the physical silver market. But with gold, central banks can buy, sell, lease, hypothecate, borrow and lend among themselves and third parties. Silver Is Inexpensive Silver is far less expensive to purchase than gold, its much lower price being due to its relative abundance underground. Silver bullion bars are the least expensive way for you to own silver, since they have the lowest premium. Convertibility Silver bullion bars can easily be converted to cash, prices are widely quoted and they are internationally negotiable. Silver Is Readily Exchangeable For the barter and exchange of inexpensive goods and services, an ounce of silver is a relatively small unit of currency, unlike an ounce of gold, which is significantly more valuable. With a much lower per-ounce price/value than gold, silver is simply more practical for everyday use as money, in the event of a paper currency collapse. Now, if you are thinking that a collapse of the U.S. Dollar is an unlikely scenario, you should understand that only 23% of the worlds other fiat currencies still exist today! Also, the U.S. Dollar is steadily losing its pre-eminence as the Worlds Reserve Currency. The Silver Market Is Small It has been said that the silver market is so small that one very wealthy person could buy a whole years worth of silver production. In 1979, the Hunt Brothers from Texas almost cornered the silver market! The Silver Price Is Volatile Due to silvers small market size, silver tends to go up faster when the price of gold rises, and it tends to fall faster when the price of gold goes down.

  • Industrial Demand Silver is in high demand worldwide for industrial use, more so than any other precious metal: for jewelry, electronics, photography, imaging, superconductivity, water purification, coinage and bullion bars. Silver Is Used Up In Industry Unlike gold, which is almost always recycled, silver gets used up during the industrial process. 50% of silver demand comes from industry, but golds industrial demand is only 10%. Pure Silver Mines Are Scarce In contrast to the numerous gold mines in existence, there are relatively few primary silver mines. Silver Is No Threat to Fiat Currency Central banks do not see silver as a threat to paper money. Gold, however, is seen as a constant threat to fiat currencies.

    Economic Factors As a precious metal, silvers price is often affected differently by economic conditions, compared to the effect of those same economic conditions on other types of financial assets. This can reduce the volatility of your investment portfolio and engender balance. Devaluation of the U.S. Dollar It is no secret that the purchasing power of the U.S. Dollar has steadily declined over time and is expected to continue to do so. Like gold, silver can provide a hedge against inflation.

    Ease of Ownership At Anthem Vault, owning silver bullion is inexpensive, easy and convenient. Our dealers margin (exchange spread) for buying bullion is minimal, and there is no charge for selling. As the owner of the actual physical metal, you have direct control of your valuable asset. ________________________________________________________________________________

    Create (or log into) your Anthem Vault account now to buy physical gold and silver bullion

Click here to load reader

Embed Size (px)