Have You Rebalanced Your Portfolio?

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photo: Richard Perry, New York Times

Gold prices are moving up sharply today as the euro is stabilizing against the U.S. dollar. If you have not rebalanced your portfolio in the last six months, now may be the time for a portfolio review. What is your economic outlook for the next 3-5 years? A well-diversified asset allocation strategy — one that includes Gold and Silver — may help mitigate portfolio risk and provide balance.

The Year-end liquidity Push is winding down. Historically, at the end of any calendar year, hedge funds and investors in general rebalance portfolios. Gold can get caught up in this liquidity (move-to-cash) event. With the new year under way, this activity should be settling, and Gold may begin to move more in line with news and events.

An article from CNBC makes three important points about the jump in Gold prices:
1. The price of Gold has breached a key 200-day moving average. Technical analysts say a close above this level could spark fresh momentum for the metal.
2. The market is still dealing with a sovereign debt crisis in the euro zone. Gold should be well-supported against this backdrop.
3. Buyers in India are stocking up ahead of the wedding season later this month. Buying there is expected to continue through March.

What percent of your investable assets should be allocated to Gold? The percent of your portfolio you choose to commit to Precious Metals depends on your personal goals and risk tolerance, as well as your outlook for the economy. Consider your allocations across your IRA, 401(k) and personal portfolio.

To stay ahead of the trends, check out the APMEX Daily Gold & Silver Market Report, updated three times throughout the trading day.

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Consider the well-known, premier Pamp Suisse Gold Bar, As Low As $39.99 per Bar Over Spot. Easy to stack and store, 1 oz. Gold bars are one of the most popular ways to invest in Gold. The 1 oz. Pamp Suisse Gold Bars are among the purest Gold bars you can own at .9999-fine. Each comes in a tamper-evident assay card stamped with a unique serial number, which guarantees its authenticity. Pamp Suisse bars are well-known, making them easy to sell if you need to liquidate assets. The bars depict Fortuna, the goddess of fortune and luck — widely considered the most beautiful Gold bar design. Order your Pamp Suisse Gold bars today, for as low as $39.99 per bar over spot.

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Video Commentary: The Potential Impact of the European Crisis on Investments

Is your portfolio ready?

With the European debt crisis continuing to escalate, now could be a critical time to review your asset allocation strategy, particularly as you consider the global economic outlook for the next 3 to 5 years. Having a well balanced portfolio – one that is properly diversified across all asset classes including stocks, bonds, cash and Gold – has perhaps never been more important.

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European Debt Crisis: Alternative Outcomes from History

No one can predict the outcome of the European Union (EU) debt crisis or the impact on the global economy. Regardless of the outcome, if you’ve allocated your investments among asset classes that historically do not move in the same direction, you’ve got a degree of protection for your portfolio. Learn more in our video commentary as APMEX Chief Executive Officer, Michael Haynes, reviews recent economic history and discusses three possible outcomes of the EU debt crisis and the potential impact on YOUR investments.

Uncertainty and Your Portfolio

Global uncertainty and the inter-relationships among world markets mean that an asset allocation strategy that includes exposure to non-correlated asset classes is an integral part of a long-term investment plan. Historically, Gold has played a key role in maintaining a well-balanced portfolio. As this chart shows, Gold has held – and even increased – its value over the past decade while the world’s major stock markets have suffered.

Your Asset Allocation Strategy

When determining your asset allocation strategy, you should consider each asset class – cash, bonds, stocks and Gold – and how each class is likely to perform over the next 3 to 5 years, based on your view and personal economic outlook. If you don’t have exposure to Gold, perhaps now is the time to consider how this world-class asset – with its history of offsetting the uncertainty in stocks and bonds – may help you achieve better balance.

Our Most Popular Products

APMEX offers a variety of precious metals investment options with beautiful Silver American Eagles and Gold American Eagles. Considered some of the most beautiful coins ever minted, American Eagles are among the finest bullion coins in the world. New and seasoned investors alike can purchase American Eagle bullion coins to cater to their individual investment needs.

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Why Should You Choose APMEX?

APMEX is one of the nation’s largest and most active precious metal dealers. Our customer service reputation is unmatched by any other dealer. In a recent survey of APMEX customers, we achieved a 98% Customer Satisfaction Rating.

At APMEX, we focus on six key areas to satisfy YOUR needs:

Price – You will consistently find that our prices are among the lowest in the industry. We display both our buying  and selling prices for most products. This transparency is unique within the precious metal field.

Selection – You will find an unmatched assortment of Silver and Gold coins, bars, and rounds. We also offer a wide variety of Platinum and Palladium coins and bars on our website. Our inventory  selection is second to none!

Service – APMEX promises that you will receive prompt, helpful and courteous customer service – every time!

Security APMEX believes that you deserve the highest levels of security when you make your purchase. You can rest assured that your private data is safe and secure. From the moment you place your order to the time your order is delivered to your door, your personal data is safe with APMEX.

Convenience – Our website allows you to make a purchase 24 hours a day, 7 days a week, 365 days a year. If you prefer to call, our APMEX Qualified Representatives are happy to assist you from 7:00 a.m. to 5:00 p.m. (CST), Monday through Friday.

Satisfaction Guarantee – Your satisfaction is of paramount importance to us. We guarantee your satisfaction with a refund, return and/or exchange policy. At APMEX, you can purchase with confidence.

Open Your Free Account With APMEX Today!

Balance your portfolio with the 4th asset class of Gold.

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WHAT TYPE OF INVESTOR ARE YOU?

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Click on photo to take Quiz

What is your outlook regarding the future of oil prices, world peace, the U.S. budget deficit, the European debt crisis and unemployment? Your opinions about worldwide political and economic events should help shape your asset allocation strategy — including the percent of your portfolio you dedicate to Gold and other precious metals.

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Take our ”What Type of Investor are You?” quiz to see whether your allocation to precious metals is in proper balance given your outlook about key global issues. The quiz will help you:

  • Pinpoint your views on topics that are likely to affect the financial markets.
  • Learn how precious metals have historically reacted during times of inflation, global political disruption, and weakness in the U.S. dollar.
  • Determine whether you might make adjustments in your asset allocation into precious metals.

Whatever the future holds, a well-balanced portfolio with asset allocation that includes exposure to Gold and other precious metals can help protect your wealth. You might have questions and we would like to help. Call our non-commissioned Account Managers toll-free at 888.518.7464 Monday through Friday from 8 a.m. to 5 p.m. Central time.

Balance your portfolio with the 4th asset class of Gold today.

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Investors Worldwide Choose Gold as 4th Asset Class; Gold Hits $1800 per oz. on Wednesday

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In Wednesday’s video message, Michael Haynes, CEO at APMEX, discussed why foreign investors buy Gold in greater quantities than the U.S. investors and how the worldwide acceptance of Gold as the 4th asset class has established Gold as a global asset. Gold Prices reached record highs over the past few weeks as investors worldwide flock to Gold as a safe haven.

Historically, investors buy Gold and Silver to balance and diversify their portfolios during high inflation periods. With the value of the dollar continuing to spiral downward, many investors have chosen to invest in precious metals.

Michael R. Haynes is a 30-year veteran of the precious metal and rare coin markets. He has served as a board member, president, COO or CFO of nine different public and private companies engaged in the specialty retail, distribution, e-commerce and manufacturing businesses.

Balance your portfolio with the 4th asset class of Gold today.

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8.5.11 WEEKLY RECAP

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Gold has moved opposite of the S&P 500 since February. The chart above gives a graphic example of the negative correlation between Gold and one of the other asset classes, stocks. Since February, economic stress in Europe and the U.S. has pulled the S&P 500 down while Gold moved higher.

After the Democrats and the Republicans came to an agreement and prevented a default on our nation’s debt, conventional wisdom says the market would boost as business and investor confidence increased. However, today’s reality is that the stocks ended low in the face of uncertainty over the debt deal. The terms include a $400 billion increase in the debt limit immediately, a $500 billion increase this fall, immediate spending cuts of $900 billion, and the creation of a Congressional commission to identify another $1.2 trillion in spending cuts.  Former Under Secretary of Commerce Robert Shapiro described these terms as “a mindless way to run a government.” J.J. Kinahan, managing director with TD Ameritrade, was quoted as saying, “Debt deal or no debt deal, we have some fundamental problems in the economy that we’re not dealing with.”

Monday’s extremely disappointing manufacturing report and last week’s revision of first-quarter growth estimates caused this change in focus. More bad news for the economy was released Tuesday; even though incomes rose in June, consumer spending fell (along with consumer prices). With most economists’ expectations of a credit rating downgrade from the top-notch AAA rating, stock futures were down and investors flocked to safe havens including Gold, which hit new record highs this week before falling victim to the massive selloff affecting all markets.

The stock markets are viewing a recession as likely as prices have continued to decline; stock prices hit their lowest points in almost two years. The concern has driven a number of investors to Treasuries, which is causing inflation concerns with the Swiss Franc and Japanese Yen. Mike Ryan, Chief Investment Strategist at UBS Wealth Management Americas, said Thursday, “The mood right now is gloomy…The burden of proof is for better data that show the economy is not falling into recession. Tomorrow’s payroll report is crucial. If we see another disappointment, the stock market will have significant downside from here.”

The highly anticipated payrolls report was released this morning; it indicated an increase of 117,000 jobs in July. The unemployment rate fell .1% down to 9.1%. These numbers were better than expected which finally brought some relief to Wall Street after two days of tension. Gold gave up early gains amid the news but one analyst says that South Korea’s recent purchase of Gold signals that it’s still not too late to buy Gold. An executive of one company stated that South Korea’s purchase is “significant, as it represents the first purchase of Gold by the East Asian country in over a decade. It would seem South Korea has joined the ranks of those countries that have lost faith in the U.S. dollar … it is no coincidence that many of these central banks are from emerging-market economies. Many of these countries have experienced the grim reality of enduring a currency crisis first-hand.”

WEEKLY SPOT PRICES

Gold:
Spot Gold prices opened this week at $1,628.00. The high was on Thursday, Aug. 4th at $1,684.90, while the low for the week occurred on Monday, Aug. 1st at $1,608.20. Gold ended the week up $22.30 at $1,650.30. This week, the most popular Gold bullion products were 2011 Gold American Eagles, 1 oz. Pamp Suisse Gold Bars, and 2011 1 oz. Gold Maple Leafs.

Silver:
Spot Silver prices opened this week at $39.95. Silver reached a high of $42.30 on Thursday, Aug. 4th, while this week’s low for Silver occurred on Friday, Aug. 5th at $37.56. Silver ended the week down $1.93 at $38.02. The most popular Silver products on APMEX.com this week were 2011 Silver American Eagles, 2011 Silver Maple Leafs, 1 oz. Silver Buffalo Rounds and 10 oz. APMEX Silver Bars.

Platinum:
Spot Platinum prices opened this week at $1,781.90 and ended the week down $66.90 at $1,715.00. Popular Platinum products this week included, 1 oz. Platinum Bars, 1/10 oz. Platinum American Eagles, and 1 oz. Platinum American Eagles.

Palladium:
Spot Palladium prices opened this week at $832.30 and ended the week down $90.30 at $742.00. Palladium investors preferred 1 oz. Pamp Suisse Palladium Bars and Palladium Canadian Maple Leafs this week.

 

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Released in 1997, the Platinum American Eagle coin is the only investment-grade platinum coin from the U.S. Mint. Since its introduction, the Platinum Eagle has become one of the world’s most widely-traded platinum bullion coins because of the patriotic design and platinum value. The obverse design celebrates freedom and opportunity with a portrait of the Statue of Liberty.  The reverse design is unique in that it changes each year; strength and security are portrayed in the theme of the American eagle. 
  
APMEX features the Platinum American Eagle coins in 1 oz., 1/2 oz., 1/4 oz., and 1/10 oz. denominations as well as uncirculated, certified, and proof conditions. Offering a wide selection of platinum products, APMEX can help you establish a platinum portfolio. Eligible for placement in precious metals IRAs, Platinum American Eagles can act as building blocks for investment portfolios. Start building your Platinum investment today!

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Should the Governments Buy GOLD?

 

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The World Gold Council reports that the world’s central banks hold roughly 29,000 tons of Gold. Photo by Richard Perry/ New York Times.

 (Article reprinted from The New York Times,  Aug. 2, 2011.)

 

 Introduction

Private investors and central banks have scrambled in recent years to stock up on gold. This summer, they drove the price over $1,600 an ounce for the first time ever.

For millennia, people have killed and died in pursuit of gold. In the recent downturn, so many investors have been eager to buy gold that it is sold in vending machines. Governments are as captivated by it as individuals are: for nearly a century, many nations’ central banks have stashed hoards of gold bullion in a vault at the New York Federal Reserve.

When asked recently why central banks hold gold rather than, for instance, diamonds, Ben Bernanke said “tradition.” Given the long history of humans considering gold valuable, does it make sense to continue this tradition, or should central banks focus on other assets with more intrinsic value?

Debater 1:   It Had to Be Gold

By Sanat K. Kumar, who spoke to “Planet Money” about gold in February,  is chairman of the Department of Chemical Engineering at Columbia University.

Anyone trying to think of some other element or compound to take the role of gold should consider why it has been used as a currency since time immemorial. If we are looking for something to be useful as currency, we need a commodity that meets a few requirements: First, its composition must be easy to define. It should also be relatively immutable, but not so inert that it cannot be purified into the form that is acceptable as an asset. It should be rare but not so rare that it is impossible to find. It is easy to see how ancient civilizations came to consider gold a magical, mythical material: it satisfied all these demands.

Gold is relatively unreactive, but it has a low enough melting point that it could be processed easily by past civilizations. In contrast, something like platinum, which is also relatively inert chemically, has a melting point of 3,000 degrees Celsius. This made platinum almost impossible to process until relatively recently. Similarly, gold is rare in the earth’s crust, but there is enough of it to go around.

Still, times have changed. Let us consider the issue today: Processing is no longer a problem. We can readily purify elements like platinum, rhodium and others, or we can synthesize any desired compound to practically any degree of purity. The issue of contamination is also no longer germane.

Thus the only modern requirements for an asset are rarity and immutability — and a suite of compounds and elements would qualify. So gold is no longer the one and only thing that could be used as an asset. Indeed, Ben Bernanke is correct — the argument for it is simply tradition. The value placed on gold comes from an emotional attachment handed down to us from our ancestors.

Debater 2:  A Proven Asset

By Ron Paul, a United States representative from Texas who is running for president for the third time, is the founder of Campaign for Liberty. He is the author of “The Revolution: A Manifesto” and “End the Fed.”

No asset has intrinsic value. An object is only valuable insofar as it is able to satisfy the wants and needs of individuals, and its value is determined by the subjective judgments of individuals. No other commodity has been as universally valued over time and across as many societies as gold.

Gold satisfies all the properties of money. It is durable, portable and easily divisible into bars and coins that share uniform properties. It is easily recognizable through visual, tactile, chemical and other means. Gold’s value and purchasing power are stable over time, as its supply grows slowly and it cannot be created ad infinitum as paper or digital currency can be.

Because of these properties, gold has always been considered an ideal store of value and medium of exchange, and central banks have always sought to hold it because it is the ultimate monetary backstop. When society and the monetary system break down, even if nothing else is accepted as a medium of exchange, gold still will be.

The Federal Reserve does not actually own gold; it only holds gold certificates as an asset. It is the Treasury Department that claims ownership of United States gold reserves. Historically, gold itself circulated as money, in the form of coins. Paper currency began to circulate for the sake of convenience, but these were only promissory notes that could be redeemed in “lawful money,” i.e. gold, on demand. Once the use of paper currency was established and most gold was held in bank vaults, the government seized the gold and left the people holding paper that could no longer be redeemed for gold. The paper currency was immediately devalued by 40 percent, reducing Americans’ purchasing power by an equal amount.

I would prefer to see the government not hold the gold it does. It should be returned to the people from whom it was taken. There is no need for the government to hoard gold or to keep gold in vaults as backing for currency; gold itself should be the currency that circulates.

 

Debater 3:  Gold Fever Is a Symptom of Inflation Fears

By Allan H. Meltzer, a visiting scholar at the American Enterprise Institute and the Allan H. Meltzer University Professor of Political Economy at the Tepper School of Business at Carnegie Mellon University, is the author of “History of the Federal Reserve, Volume I: 1913-1951″ and “Volume II: 1951-1986.”

Gold was money through most of our history, although after 1934 it was restricted to settlements between central banks. Its role in international payment settlements was further restricted in 1968, and it ended in 1971 when President Richard M. Nixon embargoed gold sales and floated the dollar exchange rate. After 1971, several central banks sold some of their gold stocks because the only revenue from holding gold is the speculative return if the gold price rises. After all, gold is no longer money, and holding it earns no interest.

Gold is a commodity with a unique history. It allows individuals to readily transport large monetary values, so it has long been favored by refugees. People who fear inflation or confiscation of wealth buy gold, expecting it will be stable or rise enough to protect the holder. That was true for European refugees in the 1930s, and French and Indian citizens have long been famous for holding gold.

Today, uncertainty about the future financing of large U.S. budget deficits and inflationary Federal Reserve policy are increasing the demand for gold. People in China and other nations with inflationary policies are also stocking up on it. Saudi Arabian sheiks protect part of their wealth by holding gold.

The modern frenzy for gold is a symptom of a fundamental concern: inflation. The world would benefit from an agreement by major central banks in Europe, Japan and the United States to maintain zero inflation. China could join after it removed its exchange controls. That agreement would allow other countries to fix their exchange rates and “import” low inflation. The world would have both more stable prices and more stable exchange rates.

The unrestrained U.S. monetary policy since we abandoned gold has not provided stability.

(End of reprint)

Follow the example of the central banks around the world; add Gold to your investment portfolio. APMEX is one of the most trusted and largest dealers of Gold and precious metals. APMEX maintains one of the world’s largest selections of precious metal products, including the popular Gold American Eagle Coins and the Gold Canadian Maple Leaf Coins.   

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