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SEPARATING YOU FROM YOUR MONEY
From Blanchard in New
Orleans I received a postcard screaming “Protect your wealth with
something solid!” Beneath that headline was a picture of an
American flag and two St. Gaudens double eagles.
On the back the card
asked if I was tired of losing money, etc. It offered to
solve all my problems by selling me uncirculated $20 double eagle
gold pieces. “These heavy, gold-rich coins provide intrinsic
value, liquidity, and privacy benefits.”
Gold-rich
coins? Heavy? These are investment
criteria? Somebody give the copywriter some imagination pills. And
mercy, there’s that old red herring “privacy benefits.” What
privacy benefits?
Now Blanchard’s the same
company a year or so ago that sent out a “special report” to all its
clinets advising them that they had finally discovered that gold was
a terrible investment that was never going to recover. They had
also discovered that you had better (Quick!) send them your
American Eagles and Krugerrands so they could swap you into –
rare coins! Like these “heavy, gold-rich” double eagles.
That made me want to ---
go back and check some statistics. Back in July 1999, spot gold was
nearly at its bottom at $254.50, while the “heavy, gold-rich” $20s
sold for $440 each (MS62 St. Gaudens). Four years later, in July
2002, Gold was trading at $323.80, up 27.2% from 7/99. Meanwhile
St. Gaudens $20 golds were selling for $415, a 5.7% loss.
What’s the lesson? If
you want to invest in gold, then invest in gold, not
quasi-rare coins with inflated prices pumped up by companies with
boiler-rooms full of telephone salesmen. Buy what makes sense
for you, not what makes money for them. -- FS
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