What’s another way to spell gold?
FUD stands for fear, uncertainty and doubt. The acronym was coined by Gene Amdahl in 1970 when he left IBM to start his own company. He believed IBM would train its salespeople to assault his new venture in the subtlest of fashions — a whisper campaign that would frighten potential customers from switching to Amdahl products.
Amdahl turned out to be correct in his assessment of IBM’s competitive tactics… and FUD entered the lexicon of business terminology.
Well, we have the classic witches’ brew of investor FUD in play at the moment — with interest rates low, fear of a U.S.-China trade war high and other economic and political issues rumbling like thunder from an approaching storm.
And when there’s FUD in the air, it’s a good time for gold. That was made clear by last week’s spike in gold and other precious metals after six years of relatively low volatility.
Unlike other economically driven commodities, gold is pushed by politics. And right now there’s enough economic and political unrest to bulldoze a mountain of gold.
There’s the aforementioned conflict between the U.S. and China… a botched Brexit… riots in Hong Kong…
And the looming presidential election, which will no doubt be a battle between Trump and whatever Democrat emerges from the fray of candidates seeking the nomination.
Plus, there are currency concerns. A weaker dollar generally means a higher gold price — and it looks like that’s where we’re heading…
Finally, there’s an accelerating mistrust of governments and the financial system. And the rise of cryptocurrencies and blockchain is only fanning the flames of cynicism that big banks have too much control over the money supply and that the best interests of the public are not, shall we say, top of mind for them.
In short, FUD all over the place. Hence the renewed interest in gold.
Physical gold. Classic gold bugs will tell you not to bother with GLD (the biggest gold SPDR), mining stocks and other “gold” investments that don’t allow you to access the real thing.
Even if you don’t ever need to tap into your gold during a crisis, it’s still good to have in your portfolio as a hedge. Up to 5% is what most experts suggest.
Now, the million-dollar question, practically speaking, is how can you — in the interest of fortifying your portfolio — buy and hold precious metals?
It’s a fair question. Even for the affluent, investing in gold can prove to be a minefield rather than a gold mine if you don’t know what you’re doing.
Make no mistake, this is a good time to buy gold — plus silver, platinum and palladium — before prices go even higher, as it appears they will.
The other precious metals tend to rise along with gold. So if you aren’t comfortable investing in gold, silver is a lower-cost option. And if you’re willing to take the time to understand the value drivers of platinum and palladium, they too can be worthy alternatives to gold.
Here’s how to start investing in precious metals…
First, consider how much of your money you want to invest — a dollar amount or percentage that balances your budget and goals.
Except for smaller amounts in coin or bar form, you don’t want to risk storing too much in your home. Your homeowners insurance won’t cover it. It’s just too easy to suffer an unrecoverable loss.
And if you take it out of secured storage to put it in, say, a bank safe-deposit box, two things can happen. One, the value can go down, and two, you will most likely have to pay for it to be assayed (weighed and valued) again.
Here’s how the smart investors are doing it: They keep a small amount of gold and silver coins or small bar of bullion at home in a fireproof strongbox. The rest they keep in a safe storage unit. Either a facility in the United States or one located internationally.
If you’d like to start investing in precious metals right now, we have a trusted partner in Hard Assets Alliance. They provide the easiest way to invest in the best hedge against FUD.
To your wealth,
Editor-at-large, Unconventional Wealth
Steffi Baker is the editor-at-large of Unconventional Wealth. For the past 10 years, she worked with a small strategy consulting firm that dealt exclusively with wealth-management companies, helping them market themselves to ultra-high-net-worth clients.
Through this line of work, Steffi attended events in London and New York and hobnobbed with household names and international...