Market Specialists? More Like Market Amateurs

When gold broke through the $1,000 barrier in March of 2008, many so-called market specialists predicted that the “gold bubble” would immediately burst, resulting in a sharp plunge in the value of gold. The same thing happened when gold broke $1,100, $1,200, and, more recently $1,300 in September of 2010.

Regrettably, these market “specialists” are no different than the same experts advising people with “hot stock picks” and various other high risk investments. All the while, as their investment advice tanks, gold and the precious metals market as a whole continues to climb in a steady, positive direction, indicating sustainable appreciation. Moreover, with continued concern over currencies, credit, and other negative economic indicators, the precious metals market has reclaimed its position as an investment safe haven.

Gold continues to climb. As it begins its journey towards flirting with $1,400, there will be rumblings of a massive dip in value. Admittedly, the market may correct itself—but we speak of pennies on the dollar compared to the growth it will continue to experience. This correction will occur at every broken threshold, as long-term investors aim to take profit spurred on by fear and uncertain territory. However, a correction is very different from a bursting bubble. The gold market will continue to move forward positively as long as federal, national, and global debt accumulates, as long as currencies remain unsubstantiated, and as long as unemployment remains atrocious.

Every “market specialist” has offered an opinion on what immediate actions need to be taken to turn the country a complete one hundred and eighty degrees. Unfortunately, these recommendations are coming from people who were created within the collapsed system of credit, debt, and production (or lack thereof). There is no quick fix. To truly address all of these negative economic conditions will take a very, very long time. It took decades to cause these crises—to think that one can reverse decades worth of poor decisions overnight is to live in a fantasy world.

The time is now to buy gold. As the world becomes more educated on the crisis at hand and as gold continues its massive climb, the window of opportunity will close. Protect your future today.

Call United Gold Group today at 1-800-488-3903, and ask to speak to one of our Senior Account Executives, who will be more than willing to help you with your precious metals investment needs.

Call Today: 1-800-488-3903

Gold vs. The Stock Market Which is Truly the Better Performing Investment?

One of the biggest misconceptions in the United States economy is the state of the stock market. Many people base their faith in the economy on the performance of the Dow Jones Industrial Average (DJIA), often times because it has been publicized as the primary indicator of the direction of the market. Unfortunately for your average person, the DJIA is hardly as much of an indicator of the economy as it is hyped to be. The DJIA is a price-weighted, averaged listing of 30 companies, and is misrepresented as the whole market. In fact, not only is the DJIA an inaccurate indicator of the United States economy, but many experts argue that it isn’t even the most effective gauge for the health of the United States Stock Market. That title truly belongs to the Standard & Poor’s 500 Index (S&P 500). The S&P 500 is an index of 500 stocks, selected based on a number of factors: market size, liquidity (how easily a stock can be traded without affecting its price), and which industry it operates within.

So why shouldn’t you invest in the stock market? In order to understand this, it’s necessary to understand what it is. The stock market is, essentially, where shares are issued and traded to allow companies access to capital. It additionally provides investors with the belief that they are receiving an owner’s stake in the company so that they may receive a share of future earnings. In reality, though, the investor is receiving an unsubstantiated, un-backed promise based solely on the success of a company. Worse yet, since the stock market is driven by human interaction, the investor is almost always manipulated by the company’s executives, who have access to sensitive insider information.

In a heartbeat, a stable, multi-billion dollar corporation can hit rock bottom, leaving its investors in many cases with nothing to show for it. For example, in August of 2000, energy giant Enron (which had revenue in excess of $100 billion USD) had its stock peak at $90 per share. By the end of November of 2001, it was worth $0.61 per share. Here is the biggest pitfall with investment into the stock market: the worth of something deemed so valuable can literally become worthless. The saying of the stock market being this “high risk, high reward” place of investment still doesn’t hold, especially if you compare its performance relative to other areas of investment. Such an area includes gold, which is often mistakenly looked at as simply a safe investment with no high reward potential. Attached below is a simple chart outlining the performance of gold compared to the S&P 500, which clearly tells a different story:

Analyzing this graph, we learn two very important things. First, gold outperforms the S&P 500—the primary stock market indicator—by an amazing margin. Second, the stock market may not be as much of a “high risk, high reward” investment, leaving it only as a “high risk” investment. The bottom line is this: gold cannot ever be worthless, and it continues to outpace other areas of investment. It is always a good idea to buy gold.

Where should you invest your money, then? First and foremost, never put all your eggs in one basket—a diverse portfolio is always the smartest route to take. One of the best ways of diversifying your portfolio in such a way that ensures it always retains value is by investing in gold and other precious metals. Call United Gold Group at (800) 615-1513 today and talk to one of our Senior Account Executives to get on the right track to protecting you and your family for the future.

Central Banks - Net-Buyers of Gold for First Time in Decades

Gold could double in price sooner than most anticipate, and for a variety of reasons. More often than not, it is often wrongly assumed that the value of the United States dollar is the single driving force behind the price of gold. While this may have been a more viable position years ago, the ever-globalized world economy has thrown many more variables into the equation. On many occasions, we see that the United States Dollar is strengthening, yet gold prices continue to grow. The recent economic malaise that has hit the world, however, has put much into perspective. This is particularly true with respect to the credit woes of two major European Union countries: Portugal and Greece. With the bond markets in Europe suffering due to the lowering of these countries’ credit ratings, the strength of the Euro has fallen, especially with respect to the US Dollar. Simultaneously, traders have begun buying gold in vast amounts as a hedge against European currency risk. Traditionally, gold has been seen as a hedge against only the US Dollar, but in the globalized economy of the 21st Century, this is clearly not the case.

Faith in the sustainability of major currencies is no surprise. With the United States Dollar and the Euro, arguably the two driving world currencies, we see an intrinsic flaw in their structure: what is there to back their promise of sustainability? These two fiat currencies have no “real” value. The rest of the world has taken note of this, and the precious metals market has seen an upsurge of demand by the most logical of buyers: central banks. For the last twenty years, central banks were sellers of gold. Amid economic uncertainty and the safe-haven nature of gold investment demand has been growing at extremely fast rates, leading central banks to not only become net buyers once again, but in many cases to outright stop selling their gold. Without surprise, two of the major countries buying gold are China and India. India, in fact, bought out nearly half—200 of the 403 metric tons—of gold that the International Monetary Fund (IMF) put up for sale at the end of 2009. While these two countries represent the big players driving up the demand and subsequent price of gold, the central banks of smaller countries, such as Sri Lanka and Mauritius, have entered the mix, buying gold from the IMF as a safe-haven amidst the economic turmoil.

What does this mean for the average consumer? As more and more central banks begin to buy gold coins, bullion, bars, etc., the credit struggles for European countries continue, and continued economic uncertainty grows, gold and other precious metals will continue to rise and potentially double. That said, it cannot be stressed enough how important it is for the average consumer to begin seriously diversifying his or her portfolio with precious metals before while it is still affordable and in supply.

Start taking the steps today. Call United Gold Group at (800) 615-1513 today and talk to one of our Senior Account Executives to get on the right track to protecting you and your family for the future. Set up your Gold IRA or 401K today!