Where Is the
Best Place to Park Money in 2006?
By Craig R. Smith
Phoenix, Arizona
This new year many
of us are contemplating where we should invest our
hard earned money for a nest egg for the future.
But before we take the usual approach, perhaps we
should question the traditional wisdom of investment
“gurus”.
The first question that comes to mind is: Why is
it that we believe that paper dollars are the highest
standard of financial value?
Another is: What is the reason why mutual funds
are so widely thought of as a good and stable investment?
Both currency and stocks go up and down every day
and the only stability they truly represent is that
we can absolutely guaranteed be relied upon to continue
to fluctuate for perpetuity.
Our current contemporary culture has become so accustomed
to stocks and currency that we have forgotten about
gold and other tangible assets that have been the
standard to which “money” has been measured
for millennia.
Tangible commodities and high quality collectible
investments have clearly outperformed intangible
investments like stocks, bonds and CD's again in
2005.
US investors, whose returns were eroded in 2005
by high oil prices, rising interest rates, sluggish
job creation, slowing corporate-earnings growth
and modest retail-sales gains, are hoping 2006 will
bring relief. But a growing number of astute investors
are hedging their investments with gold, just in
case.
And what a hedge it has been! In the past 3 or 4
years, gold has gone up from $270 an ounce to breaking
$500.
In the fast moving and sometimes confusing world
of finance, not all that glitters has performed
as well as gold. In 2006, gold, especially gold
coins, deserve a second look.
--Craig R. Smith is CEO of Swiss America Trading
Corporation. He is an economist, author, lecturer
and president of Swiss America Trading Corporation,
a brokerage firm specializing in tangible assets,
established in 1982. He has written numerous financial
articles and books.
Craig instantly engages audiences with his common-sense
analysis of national and global trends. He knows
that people want solid answers to tough questions,
especially when it has to do with financial matters
that impact the lives of every American.
Craig’s financial, political and geopolitical
expert advice has
been sought by many. He has been interviewed by
CNN, ABC, NBC, CBS, PBS, CNBC, FOX, TNT, CBN, TBN,
Time, The Wall Street Journal, The New York Times
and Newsweek.
In 2002, Mr. Smith published the 20th Anniversary
Issue of Real Money Perspectives which was written
to help investors navigate the uncertain economic
and market conditions that have caused over eight
trillion dollars in equity losses since the bull
market in stocks ended in March 2000. This 32-page
financial journal features over a dozen perspectives
on preserving wealth in the 21st century.
The following
is documentation of Mr. Smith’s assertion
that gold deserves another look:
Here’s how the numbers stack up for some of
the major tangible and intangible investment sectors,
including the numismatic category (US Gold Commemoratives,1904-1926
Mint-State 64 grade, eleven-coin series).
________________________________________
Tangible vs. Intangible Investment Overview (2005)
________________________________________
Investment .............. 2005 %RoI
SILVER Bullion -------------------- 36%
CRUDE OIL ------------------------ 35%
*Gold Comm Set. (MS64)---------- 26.9%
REAL ESTATE (median home) ------ 21%
GOLD Bullion ---------------------- 18.2%
10-year Treasury ------------------ 4.37%
S&P ------------------------------- 3.0%
NASDAQ --------------------------- 1.4%
DOW ------------------------------ -0.6%
*According to The Coin Dealer Newsletter
________________________________________
USA Today reported, “2005 was pretty much
a washout for stock investors. The major three US
indexes ended mixed, with the Dow turning its slim
2005 gain into a 0.6% loss Friday with its year-ending
sell-off. The Nasdaq managed to eke out a 1.4% gain
for the year. And the Standard & Poor's 500
posted the best performance with its paltry 3% gain.
US indexes trailed virtually every foreign market.
A buy-and-hold investor who invested $10,000 in
the Standard & Poor's 500-stock index on Dec.
31, 1999, would now have an investment worth $8,493,
excluding dividends.
That equates to an annualized loss of 2.7%. The
blue-chip barometer (Dow) is down 6.8% since the
end of 1999.”
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