How to INVEST IN GOLD. Learn the secrets of the pros Bullion or investment coins? How to avoid gold coin scams 2014 USGB

Transcription

1 How to INVEST IN GOLD Learn the secrets of the pros Bullion or investment coins? How to avoid gold coin scams 2014 USGB

2 A Snapshot of Three Investors Bob, Mary & Steve Bob invested $50,000 into a Correlated Portfolio of 5 widely held stocks in After 7 years, he experienced a 12.69% loss, or $6,343. Mary invested $50,000 into a Non-Correlated Portfolio of the same stocks and gold bullion in After 7 years, Mary achieved a 26.37% gain, or $13,186. Steve also invested $50,000 into a Non-Correlated Portfolio of 5 widely held stocks and Certified Gold Coins. After 7 years, Steve saw the greatest return, as he achieved a 51.12% gain, or $25,560. Portfolio Diversification: A Winning Strategy Diversification is a strategy Mary put $7,000 into each of these designed to manage overall stocks. Mary was left with $15,000 risk. Assets are divided into to put into gold coins. By doing this, classes. Two assets that respond in Mary created a non-correlated the same way to economic changes portfolio. are said to be correlated. Two assets that respond differently to economic changes are said to be non-correlated. Stocks and Precious Metals are two different asset classes. Each class has its own advantages and disadvantages, but a diversified portfolio makes you less dependent on a single asset class for overall performance. When stocks and precious metals are combined into a single portfolio, a non-correlated asset is created. The non-correlated relationships of these two classes are ideal partners! When gold is rising in value, stocks are generally falling in value, and vice versa. In January of 2000, Bob, Mary, and Steve each had $50,000 to create a portfolio. Bob takes his $50,000 and acquires five of the most widely held stocks, putting $10,000 in each of the following: AT&T, Coca-Cola, G.E., Microsoft, and Merck. Since all of Bob s assets are in a single class (stocks), he has created a correlated portfolio. After seven years, Bob has experienced a $6,343 LOSS! The value of Bob s portfolio is down 12.69% to $43,657. Mary wanted to diversify her portfolio by owning two classes of assets (stocks & gold coins). Mary acquired the same five most widely held stocks: AT&T, Coca-Cola, G.E., Microsoft, and Merck. Mary purchased 53.5 ounces of gold in the form of Gold American Eagles (non-certified, bullion coins) in January of 2000 for $280 per ounce. By January of 2007 bullion prices reached $610 per ounce. Since Mary had 53.5 ounces of gold, she saw the value of her bullion go from $15,000 to $32,626, which offset the losses her stocks experienced over the same sevenyear period. After seven years, Mary experienced a $13,186 GAIN! The value of her portfolio had increased 26.37% to $63,186! Mary can credit the gain in her holdings on her decision to diversify a portion of her portfolio into gold. Had she not done this, she would have experienced the same 12.69% loss that Bob incurred. By creating a Non-Correlated portfolio, Mary avoided the 12.69% losses Bob experienced and had a 26.37% gain. Another investor, Steve, also decided to diversify his portfolio by acquiring Two Classes of assets (stocks and Certified Gold Coins instead of bullion). Steve also acquired the same five most widely held stocks: AT&T, Citigroup, G.E., Microsoft, & Merck. Steve put $7,000 into each of these stocks. He, like Mary, was left with $15,000 to put into precious metals and he also chose to create a Non- Correlated portfolio. Call for a free consultation with a Precious Metals Specialist, a price quote, or to place an order.

3 The second problem with this system was the store of value problem. If you were a corn farmer and had a record crop producing more corn than you could use, you would store your corn and save it. However, over time if you did not use the corn it would go bad and its value would diminish to zero. So, the commodities used in barter all had a shelf life and only had value for a limited amount of time. Additionally, all commodities have different values to different users so there was no standard for all people. If you were poor, corn would be very important and have a high value, however if you were rich, corn may not be as valuable to you after a certain amount. This is why a system was needed so that all people would have a standard measure of values. Gold had all the answers! It is a commodity and is limited in supply. It is indestructible, so it will last forever. If you were rich or poor, you wanted it. Mankind had created the Gold Standard, a standard of value for all. Gold is money and recognized all over the world as valuable. So, when is 1 ounce of gold worth more than 1 ounce of gold? Mary s portfolio, she purchased In raw bullion coins. Since Mary purchased the basic commodity, the value of her gold is based upon the daily spot price. When Mary made her initial purchase in January of 2000, the physical demand for gold was down so she was able to acquire 53.5 ounces for $ per ounce. After this purchase, the worldwide demand for gold increased. By January of 2007, bullion was priced at $ per ounce. STEVE S KNOWLEDGE INCREASED HIS WEALTH Steve applied his knowledge of the importance of diversification to all of his investments. He knew that as long has an item has a FIXED supply and the DEMAND was steady, he would benefit. So when it came time to diversify into gold, Steve looked for 3 qualities: HISTORY, SUPPLY and CONDITION. Steve knew that the world supply of gold was large and that gold mines around the world were still digging up more gold and this would increase the supply. Steve asked his gold dealer if there was gold available that would never increase in supply. The dealer began to explain, that at one time, the United States of America was on the Gold Standard and our money was made of actual gold. Since the money was actual gold, this limited the government to how much money they could produce. Steve replied, So there is a limited supply. The dealer said, Yes, and a bell went off in Steve s mind. He remembered going to the museum as a young boy and hearing the guide explaining what made the items in the museum so valuable: HISTORY, SUPPLY and CONDITION. Steve knew he was on the right track! Steve asked the dealer how he would know if the gold coin was the actual gold from the government and not a reproduction or copy. The dealer began to explain that rare gold coins should be Certified by a third party to AUTHENTICATE and GRADE the coin. Steve asked, what does GRADE mean? The dealer explained that it was about the CONDITION, or state of preservation of the coin. The dealer reminded Steve that because these coins were real money, older coins tend to be worn from being handled. He then explained that it is not enough to have a coin of HISTORIC value if it is damaged or in poor CONDITION. True rarity comes when all three elements are combined. When a Certified (Investment Grade) Rare Coin is HISTORICAL, RARE & IN PERFECT CONDITION, the price of gold rising or falling will have little impact on its value. This is when an ounce of gold (Certified Rare Coin) is worth more than an ounce of gold (bullion). The Numismatic Specialists at The U.S. Gold Bureau will work directly with you to understand your needs. Our experienced staff will help to find specific coins to help you meet your objectives, protect your assets and grow your wealth. (800)

4 A Snapshot of Three Investors As with stocks, bonds, real estate, and other investment classes, while the long-term direction of the rare coin market is up, there are peaks and valleys along the way. If you are an individual investor planning on retiring in 20 or more years, or you are building a legacy for your children or grandchildren - and you can rely on other assets to take care of any needs for cash that might arise - you are ideally positioned to benefit from the long-term tendency of rare coins to increase in value. A good strategy is to buy and hold. You could purchase all the coins you intend to own now, or plan to invest a given amount each year. With a perspective of two, three, or more decades, the direction and level of the current market would be of little concern to you. Nor would it be critically important to select hot coins that are likely to appreciate the most within the next year or two. No one knows what the hot coin issues will be several decades out, so you would be well-served to assemble a broad range of quality rare coins. Review the 10 year PCGS3000 chart, a third-party value index of 3,000 certified (investment grade) coins. If you had bought your coins in 2000, you d be 10 years into your hold period, and you would be very pleased with the increase in value of your coins today. Conversely, if you had invested in the stock market, your investment would not have gained a penny - in fact, you would have lost money. PCGS January 2000 to June 2010 Mary owns bullion gold, but Steve owns Certified (Investment Grade) Gold Coins. So why did Steve do so much better when Mary had 55 ounces of gold and Steve had only 15 ounces of gold? Work with a Reputable Dealer: With investment grade coins, as with other asset classes, you should know your goal, including your time frame. Additionally, a reputable dealer will assist you with your specific goals. How do you know if you are dealing with a reputable dealer? Well, one way to tell immediately whether or not the dealer is concerned with your goals is whether or not they ask you questions, before they tell you what you need to know. At the United States Gold Bureau, our experts have decades of experience in the industry, and we re in this business for the long-term. Expect that you will be treated well and your specific goals will be listened to carefully. Tell us what you re trying to accomplish in the precious metals market, and we ll help you get there. RAW COINS vs. INVESTMENT GRADE COINS Mary owns bullion gold, but Steve owns Investment Grade Gold Coins. So why did Steve do so much better when Mary had 53.5 ounces of gold and Steve had only 15 ounces of gold? The answer is due to the fact that all gold is not created equal. Gold, by nature s design, is indestructible. If you apply heat to gold, it turns to liquid and is still gold. Once cooled, it becomes the familiar solid form we all recognize. If you take a hammer and beat it, you still have gold. If you drop gold into the ocean and let the salt water attack it for centuries, when you pull it up, it is still gold! This was one of the main reasons why gold became money, because of its ability to maintain its integrity without breaking down. Before gold was used as money people bartered with other commodities such as corn, wheat, livestock, etc. The problem with this system is two-fold. First, the equal value problem; what is more valuable a bushel of corn or a cow? Since each commodity had a different value, it was hard to set a standard value. For instance, how do you value a cow relative to other commodities - is it worth one bushel of corn, two, or three? Well, it depended upon which commodity you owned. If you owned the cow, of course you would consider the milk and the meat to be the most valuable. But if you owned the corn, you would say, that without corn to feed your cow, it will starve, so the corn is more valuable and the battle continued. Call for a free consultation with a Precious Metals Specialist, a price quote, or to place an order.

5 However, Steve invested in Certified (Investment Grade) Gold Coins. Steve acquired 15 of the 1889-S $10 Liberty (no Motto) gold coins, certified Mint State 63 by PCGS. There are only 88 of these coins in a Mint State 63 condition in the entire world. This fixed, low supply was the key to increased value. As the demand for gold and gold coins grew, the law of As an asset class, rare coins have outperformed conventional assets such as stocks and bonds. A broad rare-coin index, the PCGS3000, is up 23.6% in the past 10 years (see PCGS 3000 chart later in this document). By comparison, the Dow Jones Industrial Index was at 11,723 at the beginning of January 2000 and had fallen to about 10,000 by the summer of So, if you had been a long-term investor in the stock Investing During Inflationary Times During the 1920s, Germany was forced to borrow a lot of money to pay for war-related expenses and other public initiatives. In 1923, this borrowing led to inflation that soon turned into hyper-inflation the fastest that the world has ever seen. Prices doubled in a matter of hours, for months, and it became cheaper to use the country s paper money as fuel for a fire, rather than use it to buy wood. supply and demand took over. The value of these coins increased from $1,000 per coin in January of 2000 to $3,000 per coin by January of These amounts are actual prices paid for these coins at auction. Steve saw the value of his $15,000 worth of Investment Grade Gold Coins increase to $45,000, for an increase of 200% over the seven-year period. After seven years and rising interest rates, Steve s diversified portfolio of falling stocks and rising Certified Gold Coins experienced a $25,560 GAIN! The value of Steve s portfolio had increased by 51.12% to $75,560! How Have Rare Coins performed in the past vs. the Dow Jones Industrial Index? Dow Jones Industrial Index January 2000 to November 2010 market, your investment is actually lower today than it was 10 years ago. Two very important factors that are critical for individual and institutional organizations considering rare coins are: Understanding your time frame Working with a reputable dealer Know your time frame: The population, as it is called, of any particular rare coin issue is essentially static. The population of people, however, grows. More people create the potential for more coin buyers and collectors. Ultimately, more buyers and collectors competing for the same limited number of coins leads to the steady increases in values we ve described. What Caused Hyper- Inflation? Public debt was rising fast. The government printed more and more money to overcome debt. The economy started to collapse as the currency became worth less and less. Unemployment soared as companies could not sell their products. The money people had became essentially worthless. It took the creation of a totally new currency to halt runaway inflation. How Did Investments Fare? Bonds & savings accounts Suffered serious depreciation until they had essentially no value. Stocks Paid little or no dividends. Many companies went bankrupt. Real estate Offered a store of value, but many properties were lost due to lack of income. Cash Paper currency become essentially worthless. Foreign currency Capital was preserved if held in foreign currency or gold. Rare coins Collectibles, including certified coins, jewelry, art and other items retained or increased in value. (800)

6 Preserving Wealth with Investment Grade Coins Former United States Mint Facilities The 1849 California Gold Rush tested the capacity of the U.S. Mint at Philadelphia with the task of converting miners gold into coins. The U.S. Congress realized that the Philadelphia Mint was not going to be able to handle the increase in demand, so they approved the establishment of branch Mints in New Orleans, Louisiana; Charlotte, North Carolina; Dahlonega, Georgia; and Carson City, Nevada. These facilities were tasked with accepting and coining the silver and gold from various strikes around the nation. Although these facilities are closed today, their functions were quite similar to those of the United States Mint at the Philadelphia Mint between the years of 1838 and President Andrew Jackson authorized The Act of 1835, creating three of the aforementioned U.S. Mint production facilities in the South. When the Civil War began, each of these facilities was seized, temporarily closed, reopened to produce confederate money, and then finally closed for good. All three of the newly established United States Mint facilities were producing coins by Rare Coin Basics There are three types of rare coins: 1. Rare 2. Key Date/Semi-Rare 3. Common Date What determines rare coin type? The answer is two-fold: original mintage figures and certified population figures. Original mintage figures tell you how many of that specific types of coin were minted. Certified population figures tell you how many of those specific type of coins have been certified at a certain grade level. Most people feel that if a coin is 100 years old, it must be rare. However, age alone has nothing to do with rarity. Rarity is determined by supply. Here is an example where supply, not age, determined rarity. Let s take a closer look. As you can see, age does not determine rarity. It is the supply or mintage/ production figures that determine rarity. This is why it is important to know the numbers on the coins you buy. Most people will look at only the price of a coin and say I can get that same coin cheaper! This may be true for common date coins, but when it comes to true rarities, it is simply not the case. The reason is supply. Supply, Not Age, Determines Value Year Mint Original Mintage Grade Face Value Description Value 1909 D (Denver) 3,423,560 MS60 $5 Half Eagle $ O (New Orleans) 34,200 MS60 $5 Half Eagle $29,100 *MS60 = Mint State 60 (See the next section on Grading Scale.) Knowing the Numbers You must become familiar with the series of coins that you are buying to determine rarity. Having a dealer that will take time to explain all the numbers is extremely valuable. Because all three were in operation at the same time, there was a need for mint-marks to identify which facility was producing which coins. Those minted at the New Orleans facility carried the distinct O mint-mark, while the Charlotte and Dahlonega production facilities featured the C and D mint-marks, respectively. Source: United States Mint When it comes to pre-1933 gold, we know that our country was on the Gold Standard, so, when you went to the bank to cash a check, you received a gold coin. The United States Mint was responsible for minting or producing our money. As our country grew, so did our need for money. More and more gold coins were produced to reflect the growing wealth of our country. So, some gold coins that were produced year-to-year had mintage figures in the millions. Call for a free consultation with a Precious Metals Specialist, a price quote, or to place an order.

7 Legacy Program We are all familiar with the wealthy families in America -- the Rockefellers, Vanderbilts, Hiltons, Fords, Forbes, Du Ponts and others. These families all had one thing in common -- their wealth was created generations ago. The amazing thing is, even though their wealth was created long ago, the families are still benefiting from it. Today we realize that the accumulation of wealth is only the first part. Another challenge is how to retain your riches and create generational, or legacy wealth. It took Malcolm Forbes 30 years to acquire this unique collection of nine eggs and an additional 14 years to bring the $110,000,000 in value to his family. So why is TIME so important? It is easy to understand the value of something that is 100 or more years old. The real question becomes, How do you know an item will be rare in the future? Quite simply, supply. SUPPLY: An item can be rare or common the day it is produced. In the case of the Faberge eggs, there are only 50 of these in the world! The very day they were created, they were rare. Now, 200 years later they are extremely rare! HISTORY PLUS TIME: Age can make any item historical; however, some items can be historical the day of creation. The first Coca-Cola bottles were created around Even though these bottles were a very common item in their time, today they are considered RARE. common or high supply item can A become rare after 100 years. In the time it takes a common item to become rare (100 or more years), a rare item can become priceless. Great wealth takes time and the longer you wait to start, the longer it will take. Take a look at a modern day example that can change your financial position. In 1999, the United States Mint produced 1,505,026 one-ounce Gold Eagle coins. In 2001, the United States Mint produced only 143,605 one-ounce Gold Eagles. You might think that if you own a one ounce Gold Eagle from 1999, you have something special. However, when you realize that the government produced 1,505,026 of them, you understand that you might have to wait 100 or more years before the coin will reach rarity status. In that same amount of time, the 2001 one ounce coin could become priceless! Here s why. First, the supply of the coin; only 143,605 verses 1,505,026. In the 20-year history of the Gold Eagle program, the 2001 mintage is the lowest minted coin to date so it will be more valuable than any other dates. In 1907, the United States government produced 1,451,786 one-ounce Liberty Head coins. Knowing that your grandparents could have secured this coin for only $20, it is exciting to know that today you can acquire this same coin for $800. That means the value of that coin has increased 4,000%. In 1915, the United States government produced 152,000 one-ounce coins. Again, your grandmother could have purchased this coin for $20. Today you are looking at a minimum of $2,500. That s an incredible return on her money of 12,500% or a 125 times return on her investment. So putting $10,000 into one ounce RARE Gold Liberty coins would have turned into $1,250,000 today. In 2004, the Forbes family auctioned off a piece of their family s wealth in the form of Faberge eggs that Malcolm S. Forbes acquired from the 1960s until his death in Although no information is available on how much he spent to acquire these eggs, experts believe that it was a small fraction of the $110,000,000 that the sale brought to the Forbes family. There are only 50 Imperial Easter Eggs in the world, including the nine owned by the Forbes family. For the past 16 years, this wonderful collection has been shared with the public in the Forbes Galleries and in shows around the world. You can decrease the value of a RARE item by damaging the item and lowering its condition. If you have a rare item you want to keep, it s important to protect it from harm. When you preserve the condition of your rare item, you are increasing its future value. The Key: History, Low Supply, and Best Condition... plus TIME is the formula for wealth creation! Start building your wealth today. You can start with $10,000, $50,000, or $1,000,000. (800)

8 Preserving Wealth with Inve stment Grade Coins DEFINITION OF GRADING SCALE Grading is a system by which one can describe the present condition of a coin in comparison to its original condition at the time of manufacture. From the moment coins are minted, coins get marks and blemishes from contact with other coins and from being in circulation. Grading gives collectors a common language by which they can describe their coins to others. GRADING SCALE In the circulated grades, one to 10 points separate each grade. In the uncirculated grades, every number represents a grade. Each of the following numbers corresponds to a word description: In the uncirculated grades, the numbers are preceded with the designation MS for Mint State. The grades used are MS60 through MS70, with MS60 representing a coin that is uncirculated but may have heavy marks and dull luster. An MS65 coin will have few marks and none of the remaining marks can be distracting. An MS65 coin will be very pleasing to look at. At the top of the scale is the MS70, which would represent an outstanding looking coin with absolutely no marks. This perfect grade is almost never used. Coins that fall into the near-perfect category are given the grades MS67, MS68 or MS69. Proof coins are denoted with PF and are not released for general circulation. For these coins, the Proof refers to the method of manufacture and not condition. Proof coins are struck more than once on specially made planchets and dies. This gives Proof coins a deep, mirrored surface with razorsharp edges and imagery. Today, numismatists and all third-party grading services in the United States use a 70 point numerical scale that was adapted from an old method of grading Large Cents. It s called the Sheldon Scale after its originator, William Sheldon. This scale uses the first 59 numbers to deal with circulated coins and the last 11 numbers for uncirculated coins. Every number is not used. The 3 Tiers of Grading Services Coin grading and encapsulation services are generally regarded as belonging to one of 3 tiers: Top Tier - PCGS and NGC Second Tier - ANACS and ICG Third Tier - All others, including ACG, INB, NTC, PCI, SEGS, SGS. Grade Poor-1 About Good-3 Good-4 Very Good-8 Fine-12 Very Fine-20 Choice Very Fine-30 Extremely Fine-40 Choice Extremely Fine-45 About Uncirculated (AU50) Choice About Uncirculated- (AU55) Description A coin so worn that it is almost unidentifiable. It is not considered collectible except for extremely rare issues. This coin is flat with little detail remaining and with the rims worn down into the lettering. A heavily worn coin with flat details, but with intact rims. A well-worn coin with the main features clear and bold. This coin will have moderate to heavy wear, but will have bold design features. You will find moderate wear on the high points of the design. All the major details are present. This coin shows light wear on the surface and on the highest parts of the design. All the lettering and features are sharp and clear. The coin s design is lightly worn. Traces of luster may show. The coin has wear on all the high points of the design, but all of the design elements are sharp. The coin must have some mint luster to qualify for this grade. The coin will have traces of wear on most of the high points but it must have at least half the original mint luster. Only the smallest amount of wear will be found on only the highest points of the design. Most of the mint luster must be evident. Call for a free consultation with a Precious Metals Specialist, a price quote, or to place an order.

9 For example, the $2.50 Indian Head Quarter Eagle was produced from and again from at both the Philadelphia and Denver Mints. Total production of this coin was 7,250,261. If you own one of these coins, which type do you own - Rare, Key Date or Common Date? To answer that question, view the mintage charts on this page. As you will see, 7,250,261 total coins were produced, 12 different dates from 2 mints producing 14 unique coins. The average mintage figure for the 14 unique coins is 483,350. Any date of this coin that has a mintage figure above the average of 483,350 is a Common Date. Any date of this coin that has a mintage that is at or below the average of 483,350 is a Key Date. Any date of this coin that has a mintage figure of 25% of the average, or 120,837 or less, is a Rare Date. CERTIFICATION HAS MANY BENEFITS Certification is a process of registering coins with an official certifying organization to ensure their authenticity and grade the condition. Certified coins are mounted in a tamper-proof holder to protect their condition. All certified (investment grade) coins are given a unique registration number, just like a serial number, so they can be easily and precisely identified by collectors and investors, even if they don t have physical possession of the actual coin. First and foremost, it authenticates your coin as being a true United States government issue and NOT a copy, fake, replica or counterfeit. Second, once the condition of the coin is determined, it is sealed in a protective holder to preserve its rarity from damage. Third, your coin is assigned a bar code/serial number. If your coin is ever lost or stolen, you can prove ownership with this number. Finally, each time PCGS or NGC grades a coin they record it in the Population Reports so you will know how many other coins are like yours. These Population Reports are critical in determining if your coin is a Common, Semi-Rare, or Rare coin. You will also know if there is a Finer (higher quality) example of a coin that you own on the market. Due to the Gold Recall Act by President Roosevelt in 1933, the gold coins that were returned to the government were believed to have been melted down and turned back into bars. Since no records were kept of which coins, and how many of each were melted, population reports help us know how many coins are still around. This is critical in knowing if you have a truly rare coin. Mint Numbers: $2.50 Indian Head Quarter Eagle Common Dates Year Original Mintage , , , , , D 578, ,000 Key Date / Semi-Rare Dates Year Original Mintage , , D 448, , , ,000 Rare Dates Year Original Mintage 1911D 55,680 What About Certification & Population Numbers? At The United States Gold Bureau, we believe that it is very important to have all of your rare coins certified by a third party. We recommend PCGS (Professional Coin Grading Service) & NGC (Numismatic Guarantee Corp.) for certification and population count information. (800)

10 A Brief History of Gold Since the dawn of civilization, gold has been prized by every major culture and nation state. The universal appeal and intrinsic value of gold has survived the rise and fall of the Egyptian, Greek, Roman, Spanish and English empires. By the time Jesus was born, gold had been in widespread use for 4,000 years. Gold s first historically documented appearance as ornamentation dates as far back as 4000 B.C. in Central and Eastern Europe. By 3000 B.C., the Egyptians were beating gold into leaf and creating metal alloys to improve its color and hardness. During this same era, the Sumerians, in what is now modern day Iraq, began creating gold jewelry. By 1500 B.C., gold s universal popularity was so prevalent throughout the civilized world that it was the standard exchange of value for settling trade imbalances among nations. During this same era, the shekel became the first coin circulated using 2/3 gold and 1/3 silver content. By 560 B.C., the first coin minted from pure gold first went into circulation in Asia Minor and gold coins have been minted ever since. Throughout all of civilized history, nations have fought wars to gain it and have spent fortunes to protect it. In today s modern world, virtually every major nation state continues to have some form of gold coin in circulation, although their legal tender values are largely symbolic. Around the world, such gold coins have become highly prized collectibles with values that are, in many cases, exponentially higher than the value of the base gold bullion content value. Think about it! After more than 6,000 years have ticked off, gold remains the most stable, portable and universally recognized store of value ever known. Its popularity and demand are at an all-time high, and yet, many people still do not understand why some gold is worth more than its own weight in gold. Worth More Than Its Own Weight in Gold So, when is gold worth more than its own weight? Like virtually every other kind of collectible known, it all depends on the condition, supply and historical significance of the gold object. Perhaps the most extreme example of this would be the gold recovered from King Tut s tomb. After more than 3,200 years of being entombed, the treasures saw the light of day again in the 20th century. While the ultimate value of King Tut s gold is virtually inestimable, there is no doubt in anyone s mind that it is worth exponentially more than its intrinsic gold weight value. Why? Primarily, the historical significance and its rarity are what make it so valuable, but also the generally excellent condition of the treasure is a considerable factor due to gold s remarkable durability. The same three principles of rarity, condition and historical significance affect the future value of any type of collectible. For another example, consider how much the bat that Babe Ruth used to hit the last of his historic 714 homeruns would be worth today? Or, the bat Hank Aaron used to hit his 715th homerun the one that broke Babe s record? There is little doubt that each of these bats is worth more than the actual value of the wood from which they are made. Why? Once again, primarily because of the rarity of each of these individual bats and its respective historical significance. Condition in these cases is only a minor factor. Like King Tut s gold and these legendary baseball bats, the future value of any gold coin depends on its supply, condition and historical significance. Call for a free consultation with a Precious Metals Specialist, a price quote, or to place an order.

11 Avoid These Common Buying Mistakes MISTAKE 1: BUYING ONLY RAW GOLD INSTEAD OF CREATING A BALANCED PORTFOLIO WITH INVESTMENT GRADE COINS Diversification is the key to safety in all investing. Gold bullion can be beneficial for short-term goals, but the governments and central banks around the world that own gold can have a major effect on your gold s value. Gold can be used to manipulate the value of world currencies and, therefore, can be used for political purposes, causing the value of gold bullion to rise and fall overnight, wreaking havoc on your portfolio. When moving assets into precious metals, be smart and diversify. This will provide you with the most safety and growth possible and protect you from the downside risk of bullion while giving you the security and long-term growth potential that only rare coins can provide. MISTAKE 2: Owning Gold Stocks or ETFs Instead of Physical Metal Having possession of gold, the physical metal, offers the most protection that precious metals can offer. When you purchase gold stocks, exchange traded funds (ETFs), or bank storage programs, you do not own gold and you are at the mercy of a company s management to protect your investment. MISTAKE 3: Investing the Wrong Amount Just like any investment, you should not put all your eggs in one basket. Financial experts recommend that you should have between 5%-20% of your assets in gold and other precious metals. There are times when having even more of your assets preserved in metals can prevent major losses that can occur from overexposure to stocks. When investing in precious metals, knowing how much to invest comes down to one question: Can I put this money aside and not touch it for at least years? If the answer is yes, then you should trust gold to maintain your purchasing power and build wealth. If you will need that money to live on in the short term, then you should seriously reconsider entering the gold market. It s also important to note that the U.S. government now allows you to hold gold and precious metals in your individual retirement account (IRA). Your U.S. Gold Bureau representative can tell you how. MISTAKE 4: Not Understanding Premiums Over Gold Spot Prices Having a relationship with a dealer who has dedicated his life to understanding the precious metals market is a tremendous value. Most people don t have the time it takes to understand how to wisely invest in this market. When you are sick and you need a doctor that specializes in your particular condition, you have no problem paying the premium he asks for his knowledge and expertise. The same is true in the financial world. Find a dealer you can trust, ask questions and work together to create a plan to achieve your objectives. Investing in precious metals and certified (investment grade) coins can protect your assets and grow your wealth if you develop a diversified portfolio, and have the patience to see your strategy through. (800)

12 About the United States Gold Bureau All investments involve risk, and coins, currency and bullion are no exception. The precious metals, rare coin, modern rare coins, and rare currency markets are speculative, unregulated and volatile and prices for these items may rise or fall over time. The United States Gold Bureau (USGB) does not guarantee that any client buying for investment purposes will be able to sell for a profit in the future. The value of raw bullion and raw bullion coins (e.g., PAMP Suisse gold bar, raw Gold American Eagle, raw Silver American Eagle, Canadian Maple Leaf, South African Krugerrand, etc.) is largely determined by the current spot or market price of bullion. This price fluctuates throughout the trading day. The value of a numismatic or rare coin is determined by multiple factors which can and do fluctuate independently from bullion prices. These factors include: the perceived scarcity of the coin, its quality, current demand, market sentiment, and economic factors. Bullion, rare coins and rare currency can go down as well as up in value. These items may not be suitable for everyone. USGB does not determine the suitability of any specific person to purchase rare coins, bullion or rare currency. You should consult with your independent financial advisor regarding whether an investment in rare coins, modern rare coins, bullion or rare currency is right for you. You should not acquire any products from USGB if you are not qualified to make your own financial decisions. You should obtain a thorough understanding of the coin and bullion products before you acquire these products as a collector or investor. The investment value of a rare coin depends in large part on the price you pay. If you are acquiring any of USGB s products as an investment, you should evaluate its current market value, potential for appreciation and liquidity and consult independent sources regarding these factors. Since rare coins, modern rare coins, bullion and rare currency can decline in value, you should have adequate cash reserves and disposable income before considering acquiring a coin, currency or precious metals product. We do not recommend early withdrawal from accounts or securities which may result in substantial penalties or fees. You should consult with your independent financial advisor before disposing of any security, annuity, Certificate of Deposit, or other investment to acquire rare coins, modern rare coins, currency or bullion. USGB is not responsible for any changes in tax laws or other statutes which may affect any profit or salability of your coins or currency. The United States Gold Bureau is the leading authority on all things related to precious metals. Our clients from around the world look to the United States Gold Bureau for their investment needs in rare and modern U.S. and foreign coins and currency. Our professionals have more than 100 years combined experience and are ready to assist you with all of your precious metals investing and coin collecting needs. When speaking with a United States Gold Bureau professional, you should expect to be treated fairly and to receive the most accurate information available to us. At the United States Gold Bureau we highly value our relationships with our clients. This dedication to our clients has allowed us to earn repeat business on a consistent basis. More than 80% of our clients are repeat buyers! Headquartered in Austin, Texas, the United States Gold Bureau maintains a technologically advanced facility helping to ensure that each order is processed and treated with tremendous care. We re confident that once you do business with us, you will become a client for a lifetime. We d enjoy the opportunity to speak with you, even if you are just interested in learning about how to invest in precious metals. Call us anytime at (800) or visit us online at usgoldbureau.com for current news and information, tips on how to invest, FAQs, current recommendations, and much more. For a free consultation with a Precious Metals Specialist, a price quote, or to place an order, call our Gold Hotline at (800) Visit us online at