According to Bill Murphy, President of GATA (Gold Anti-Trust Action Committee), less than 2% of the American population is currently invested in Silver or Gold. Lately, as even the busiest executive, or apathetic hair dresser, start to see the results of the Federal Reserves actions take hold, they will join millions of Americans who will dump dollars for commodities. Certainly after food, shelter, clothing, security, and fuel, many will finally understand why others have already run to the safety of silver and gold to preserve their savings (whatever value those savings currently may be worth).
Depending on your understanding of economics and beliefs for the future, combined with short, medium and long term goals, the type and form of silver and gold one should acquire will vary immensely. The different investment types and prescribed amounts of PM (Precious Metal) investments cover a very wide range, which unfortunately only a small percentage of us actually with experience and knowledge understand.
Right or wrong, someone who believes the economy is in the start of a long recovery, has no fear of a dollar or COMEX crash, but wants to leverage metals for profit, might be better suited to invest in Shares ot the Miners or IAU, GLD, or SLV ETFs.
Those who believe the markets are rigged and manipulated, that the US Sovereign Bond market and US Dollar are themselves are in a bubble and about to burst (leading to a WTSHTF scenario), would probably set goals more along the lines of protection and wealth preservation, and therefore would be better served by acquiring allocated shares of physical metal in an offshore account.
While others believe taking physical metal bullion into direct possession is the only safe option. The later option eliminating any perceived or yet unseen hand in between themselves and their wealth.
The total amount of PM investment, based on the percentages of total net worth or liquid wealth, range from as little as 3% to 30%, and for the real Domesday planners as-high-as 80%.
There are plenty more examples and a plethora of options and caveats we could discuss here, but the point I would like to make is that the common theme for many first time buyers is an unfortunate one: First time buyers don't define what they are attempting to accomplish, and the don't know what the options are. Therefore, there is often no match between the acquired product (solutions) and their goals.
First time buyers can easily trip into this pit of iron spikes starting with a call to one of the myriad of companies selling silver and gold, resulting in them paying way to much for products (and services) that will never help them meet their goals.
One recently recurring theme is how buyers are coaxed into collector grade numismatic coins, which often sport a hefty premium as high as 75% (netting big margins and commissions for sellers). Goldline Corp., whom sponsors Glen Beck's TV and radio show, is currently under investigation by the LA District Attorneys Office for numerous complaints that I believe stem from this very type of sale.
Please contact me directly if you are reading this and are a first time silver or gold buyer. I truly can help you get up to speed, and help coach your efforts, enabling you to avoid many of the pitfalls that others are experiencing. Whether you have $500 to invest or $500,000, I can be of service to you. The horror stories below could have been avoided with just a small amount of education and some confidential coaching.
Buyer beware. The folks who are loosing thousands of dollars are blaming the sellers, but IMO they should only be blaming themselves for not getting educated before undetaking such an important investment. A few dealers have set up quotas, and commissioned based pay structures for their sales people, driving them to pressure first time buyers into raw deals. Don't do it!
Some of the latest horror stories about first time buyers, posted by the LA times, start below. The first story involving one dealers insistence to buyers to trade their bullion, which was unintentionally bought on margin, ended up costing the customer over $450,000 dollars!
Watch where you step and trip -- know where the pitfalls lie, before you buy or sell!
Los Angeles Times BUSINESS
November 20, 2010
A cautionary tale for gold and silver buyers
Some Monex customers allege that they were misled and even lied to by the Newport Beach firm and lost thousands of dollars on their precious metal investments, despite the bull market in gold and silver.
In these troubled economic times, it's not hard to understand why people might want to protect their life savings by purchasing a hard asset like gold or silver.
At least, that's the pitch of Monex, the big Newport Beach investment firm, which bills itself as "America's trusted name in precious metals investments" and assures clients that it's "committed to customer service."
So let's take a look at the experiences of some customers who say their trust in Monex was misplaced.
Patricia Mike, 66, of Camarillo says she had no prior investing experience when she and two adult daughters discovered Monex via the Internet in 2008, according to their lawsuit in Orange County Superior Court. Mike owned an annuity and an inheritance worth $240,000 that she wanted to protect. Her daughters, Susanne Drumheller and Johnna Mike-Price, had the proceeds of a lawsuit.
Banks were failing, the stock market had cratered. Their Monex salesman assured them that their idea of buying gold bars was the right one — calling it a "very safe, no-risk investment," the lawsuit says. They say they invested a total of $689,500.
Then the pressure started, their lawsuit alleges. Within days, the salesman was urging them not to sit on their gold bars but to trade actively in the metals market, according to their suit, so they could "double their money," even "quad" their investments.
Over the next eight or nine months he called and texted them relentlessly, sending thousands of text messages, up to 30 a day, urging them to make trades, they claim. Mike, Drumheller and Mike-Price say they gave in to his hectoring, but ... CLICK POST TITLE FOR FULL STORY
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