The Most Hated Investments Are the Best
I'll let you in on a little secret of the financial newsletter industry...
The markets that receive the least attention at any given time almost always make for the best investments over the long term, and vice versa. Here's what I mean...
For example, if we see that our editorials about oil become popular — they're getting a lot of web traffic, people are commenting and tweeting about them — oil prices will generally tend to underperform the market's expectations.
On the other hand, if we see that oil is not a popular topic, its price will generally tend to outperform market expectations.
In short, the least popular topics almost always make for the best investments over the long term.
And there's one particular topic that's getting overly shunned right now: gold.
Everyone hates gold right now. It seems like even gold bugs hate gold. But I want you to really consider everything going on around the world right now...
Post-truth politics, a resurgence in nationalism and extreme conservatism, weekly terrorist attacks, political assassination attempts, computer viruses and hackers... and on and on.
The world is currently in crisis... literally.
Early 15c., from Latinized form of Greek krisis meaning “turning point in a disease” or literally “judgment, result of a trial”
The fragile veil of security that covers the globe is rapidly destabilizing, yet the demand for the safety net remains weak.
Take a look at the CBOE Gold Volatility Index. GVZ is at its lowest point in 10 years.
The point to all this...
There probably hasn't been a better time to buy gold in a decade.
As I mentioned to you two weeks ago, I think physical gold bullion could even outperform gold stocks.
But I wanted to follow up with you today to talk about exactly what type of gold bullion to buy. Because there are countless different gold bullion products on the market, and none are created equal. Fortunately, there's a very easy answer...
American Gold Eagles
American Gold Eagles are the official gold bullion product of the U.S. Mint and are the most recognizable and liquid of all gold bullion. There's little reason to own any other gold bullion product.
A close second would be the Canadian Gold Maple Leaf. Gold Maples often sell for a lower premium over spot prices than Gold Eagles. But that difference in premium carries over when it comes time to divest. In other words, even though you might pay a higher premium for American Gold Eagles, you'll also be able to sell them at a higher premium when the time comes.
Besides, we're not collecting gold coins here, so there's no reason to mix and match. And I assure you, selling a group of coins that are all the same type is way easier than selling a hodge-podge collection.
In short, there's no reason to get cute. Buy American Gold Eagles.
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Now, the standard size for Gold Eagles is one troy ounce. But they come in three other sizes:
- 1/10 ounce
- 1/4 ounce
- 1/2 ounce
And even though the premiums are higher for the smaller, fractional Gold Eagles, I think they're the best size to own right now. And that has everything to do with liquidity.
One-ounce American Gold Eagles are very liquid. You can pretty much sell them at any time. But the smaller, fractional pieces are even more liquid. Bullion shops love them because there's a much greater chance of a customer walking in to spend $150 on a gold coin than one coming in to drop $1,300 on one.
Now, where and how do you buy these?
The only two places you should look is online and around your local bullion and coin shops. The main advantages of buying from a local bullion shop are the ability to pay in cash (which is always cheaper) and the fact that there's no risk of your gold being lost in shipping. To find a local dealer near you, just Google something like “gold bullion dealer [your city/town].”
However, buying online is sometimes cheaper, so it's always best to shop around before purchasing. There are only a few websites that compare prices from bullion dealers. But the best I've found is www.CompareGoldPrices.com.
Wherever you buy it, I strongly urge you to own physical gold now before the major moves take place.
Until next time,
As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bubble and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.
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