Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
It is quite understandable for investors to be a little skeptical about the television commercials’ telling them that now is the time to buy precious metals. After all, the value of both gold and silver has dropped substantially in 2013. It was headline news in financial publications when reports came out that billionaire hedge fund manager, John Paulsen, sold more than half of his gold holdings. Paulsen, who many investors view as a brilliant investor, took big losses when he changed the balance of his portfolio by liquidating much of his gold position. As a small investor, with the “really smart guy” selling gold, you might think twice about putting your hard-earned money into precious metals.
Understanding your investment goals
Hedge fund managers like Paulsen, George Soros and others are not your typical investors. They are more likely to jump in and out of gold and precious metal ETFs rather than buy and hold physical gold and silver for the long-term. While you have the same option as a small investor, buying physical gold and silver as a long-term investment is the more prudent investment strategy for most individuals.
Five good reasons to invest in physical gold & silver
- Federal Reserve is likely to start tapering
- Political unrest is far from over
- Stock market is due for a correction
- Higher interest rates can lead to inflation
- Long-term trend of gold and silver is up
Comments from Chairman Bernanke, as well as other members of the Federal Reserve, strongly suggest that September will be the month when the long-anticipated tapering will begin. Up until now, the market has been jittery. Once the announcement is made, either in September, or later this year, gold and silver prices will have the impetus to break out of their current range and head much higher.
Precious metals are still the place investors turn to when there is war and political uncertainty in the world. Whether you are talking about Egypt, Syria, Iran or North Korea, there is always great potential for a big event that will send gold prices soaring.
If you have not noticed, the stock market has been on a more than four year bullish run since it hit its lows in March of 2009. There are signs that the economy is still struggling, and when the market sells off, that is good for anyone who holds gold and silver.
You do not have to be an economics major to realize that when interest rates go up, that will lead to inflation and higher prices for everything we buy. Silver and Gold offer protection against inflation risk. Already, the 10 year Treasuries are up to almost 3 percent and mortgage rates are approaching 5 percent. Inflation, like a bad tooth, will be back.
If you are willing to buy and hold for the long-term, it is hard to imagine a scenario where you will not be well rewarded in the future. The trend, which started about 10 years ago, is up. Use the slight blip this year to accumulate more gold and silver at a low entry point.
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