There is no shortage of stories about investors who are reeling in a reactionary panic over their ravaged portfolios. Investment returns from traditional investments like stocks and bonds have slowed to a trickle, or stopped completely, while the dollars that are being paid are being devalued with each new dollar that is printed. There are no indications that this maddening cycle of dollar devaluation will stop any time soon, as our Federal Government said last week that another trillion dollars or more could be created in coming months. Economic conditions don’t appear to be very “investment friendly” at present, but a look into the past might shed some light on a way for investors to take a proactive approach to stabilizing their portfolios. Gold investors know that the dollar behaves inversely to gold, so when inflation increases while the dollar becomes devalued, gold value increases. This was last demonstrated during the inflationary cycle of the 1970’s, when the dollar lost around 60% of its spending power, while gold prices rose over 1000%.
Savvy gold investors know that there is also a possibility that gold could be confiscated by our government. Such a confiscation was implemented in 1933, when President Roosevelt issued an executive order forbidding the “hoarding” of gold by U.S. citizens. One of the only exceptions to this confiscation was rare and unusual coin that is valued to collectors. Investors in certified gold, need not worry about a possible confiscation, as it is exempt by the Executive Order of 1933. Certified gold has numismatic value, which is verified by two companies: PCGS (Professional Coin Grading Service), and NGC (Numismatic Guarantee Corp.). For a small premium, these companies evaluate and grade various rare coins, and sonically seal them in plastic cases, to discourage tampering or counterfeiting. Certified gold is a sound investment that assures safety, while it also preserves the possibility of potential profit.