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Ways to Invest in Gold & Silver

Gold and silver have been a store of wealth and have served as the foundation of monetary systems for centuries. Gold and silver fabricated into coin form has been trusted and used as sound money by virtually all nations at some point. Investing in gold and silver is not complicated and actually offers you a very liquid and transparent market. There are three primary ways to acquire this time-tested store of wealth: buy bullion, buy Exchange Traded Funds (ETFs), or buy options/futures.

Buying bullion seems to be the safest and smartest way to go. When you buy coins or bars, you are literally purchasing real physical gold or silver you can hold in your hand. Your investment is real and tangible, not a paper proxy or derivative that can devalue overnight in the computer dominated exchanges. Plain and simple, what you buy is what you own. This is why gold and silver are often called a “safe haven” investment. As the value of currencies goes down, gold generally rises in value. It is no secret that the value of the U.S. dollar has been declining steadily on world markets, and gold has been the beneficiary.

Exchange-Traded Funds (ETFs) trade on the stock exchange just like other stocks. Most, and the largest, ETFs are designed to track the price of gold or silver, as stated in their prospectus. The structure of these financial instruments should not be misunderstood as being a dollar-for-dollar investment in physical gold and silver for the stockholder. While the typical financial planner or stockbroker might recommend an ETF since it is a financial instrument they trade in, remember that you will not own hard, physical gold or silver. You are only buying paper stocks, and as is typical for most precious metals ETFs, a fair amount of derivatives! It can be equated to a picture of a life jacket or a picture of a life boat that won’t do you much good if your ship is sinking. 

The third method is options and futures. Understanding and participating in these markets requires time, research, and the ability to trade immediately during the opening hours of their respective exchanges. Market timing is a critical component to realizing a gain or averting a loss in these markets. The probability of your investment realizing a huge loss prior to the option or futures expiration date is considerable. Fortunes have been made in these markets and fortunes have been lost. Being that the risk of one’s investment going to zero is so prevalent, these derivatives are not recommended for the typical investor. If you are seriously considering this form of investment, it would be wise to spend your time doing plenty of research before making any drastic decisions.

A note on mining shares: The purchase of mining shares, as an indirect way of investing in precious metals, is not to be confused with owning physical bullion directly. Like all stocks, mining shares are affected to a large degree by the overall action in the stock market and possess all of the associated risks of an operating company. Physical gold’s unique status of being free of counterparty risk is why central banks, nations, high net-worth individuals and sovereign wealth funds acquire and hold onto gold and silver bullion.

Summary: Purchasing physical gold or silver is simple with a CamaPlan account and it will immediately increase the diversity of your portfolio. The CamaPlan gold and silver weekly update conference call will help you follow the social and economic conditions that affect pricing. Dollar cost averaging will mitigate the timing risks involved with precious metal purchases. Stop losing money due to the eroding U..S dollar!  Contact CamaPlan to purchase gold and silver in your IRA today.