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CBSMarketWatch notes attempts to block exchange-traded fund in silver
12:02a ET Monday, November 7, 2005
Dear Friend of GATA and Gold:
An Associated Press story generally supportive
of investment in precious metals snuck into
Sunday's Washington Post, and it is appended.
But you may get a laugh out of the story's
disclosure of still more paper derivatives to
invest in -- "structured notes" that purport
to track the prices of various industrial
metals.
Then there's this wonderful observation in the
story:
"Simply put, 'coins, bullion -- it's just too
hard to store,' says Matthew Chope, a financial
planner in Southfield, Mich."
Yes, Mr. Chope, those Refco account statements
sure do fit snugly in anyone's file cabinet.
Do you want to bet that Jim Rogers is glad he
took that route, thereby proving that you can
be right and still be fatally wrong?
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Some Advise Adding Metals to Portfolio
The Associated Press
via The Washington Post
Sunday, November 6, 2005
http://www.washingtonpost.com/wp-
dyn/content/article/2005/11/06/AR2005110600955.html
NEW YORK -- As inflation fears grow, some advisers are steering
their clients into precious or industrial metals as a way to add
luster to portfolios.
Pinpointing the right vehicle in the world of metals investing isn't
easy. But as demand has increased for hard assets to offset rising
inflation, more products are cropping up to tempt even small
investors into metal.
Barclays Global Investors, for instance, is planning to launch a new
exchange-traded fund tracking silver called iShares Silver Trust, a
cousin to two gold ETF funds already trading. The firm filed a
registration statement with the Securities and Exchange Commission
in June for the new product, but wouldn't comment on a timeline for
its launch.
The planned silver ETF captured some attention last month, when a
nonprofit U.S. silver industry group urged the SEC to reject the
fund because it could buy up enough silver to make the metal too
expensive or illiquid. That future demand for silver also could make
a silver ETF attractive to investors.
"A lot of people think silver is undervalued right now," says Kirk
Kinder, a financial planner in Palm Harbor, Fla. Silver, unlike
gold, is often used in industrial operations, and a tight market
could create a shortage that fuels demand, he says.
Various precious-metals mutual funds exist, and have long been a
place where investors have sought refuge amid a poor-performing
stock market and inflationary environment.
Many mutual funds have a mix of gold, platinum and palladium mining
companies, and require low minimum investments. Earlier this year
Morningstar Inc. listed American Century Global Gold and Vanguard
Precious Metals and Mining among its favorite precious-metals funds.
Buying the stock of a metals producer is the simplest way to gain
exposure. Popular gold-mining stocks include Newmont Mining Corp.
and Placer Dome Inc., although advisers say investing in a public
company doesn't provide the same protection from market tumult as a
vehicle that invests in a broad mix of metals producers or directly
owns various metals.
Another option is a structured note, a vehicle typically offered by
financial institutions for wealthy investors. With these notes,
investors get a return that is linked to the performance of certain
metals over a set period, such as five years. On maturity, investors
get their initial principal back, plus a cut of the performance of
the underlying metals.
Raymond James Financial Inc. has offered structured notes this year
linked to metals and indexes. The firm developed a four-year
principal-protected note in June around five industrial metals --
aluminum, copper, nickel, lead, and zinc -- and the FTSE/Xinhua
Index of 25 Chinese companies. The product, called the China note,
is currently up 6 percent, said Fred Whaley, managing director of
Raymond James' alternative-investments group in St. Petersburg, Fla.
Clients typically invest $25,000 to $50,000 in the notes. "We've
been offering them this year because of the interest in
commodities," Whaley said. The products are designed to provide
exposure to metals, but with added diversification to protect
against swings in metals prices. "We have investors who think they
want (metals) but don't understand the risk of volatility in the
marketplace," he said.
That volatility doesn't appeal to some. Historically, gold has
provided stability during times of confusion, but many don't like
how its price can languish or soar. Gold has recently traded at its
highest price in 18 years, around $480 an ounce. "I've never been a
gold bug," said Neil McCarthy, a financial planner in Roswell,
Ga. "It's more speculative than other commodities, from my
perspective."
For those who are interested in metals, here are a few basic rules
to keep in mind:
-- Plan on a long-term investment, as metals can be illiquid or have
heavy tax consequences upon sale. Gains in ETFs, for instance, are
taxed at a higher rate, as gold and silver are
considered "collectibles" and investors are treated as if they owned
the underlying metals. Advisers suggest buying ETFs in tax-deferred
accounts, such as an individual retirement account.
-- Keep it simple. An investor can buy gold or silver coins through
a precious-metals dealer, but that requires expertise and proper
security. While funds charge a fee, metals are kept in a safe place.
Simply put, "coins, bullion -- it's just too hard to store," says
Matthew Chope, a financial planner in Southfield, Mich.
-- Diversify. With worries that the easy money has already been made
in metals like gold, diversification is key. Rather than pick one
metal, look for products invested in a metals that can be used for a
range of purposes, such as electronics or electrical applications.
-- Limit portfolios to 5 percent-10 percent in alternative
investments. Precious metals in particular can be risky and volatile.
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RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS
Free sites:
http://www.cbs.marketwatch.com
http://www.usagold.com/amk/usagoldmarketupdate.html
http://www.capitalupdates.com/
http://www.silver-investor.com
http://www.thebulliondesk.com/
http://www.goldismoney.info/index.html
http://www.minersmanual.com/minernews.html
http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
http://www.investmentrarities.com
http://www.kereport.com
(Korelin Business Report -- audio)
http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)
http://www.resourceinvestor.com
http://www.goldpennystocks.com/
Subscription sites:
http://www.lemetropolecafe.com/
http://www.interventionalanalysis.com
http://www.investmentindicators.com/
Eagle Ranch discussion site:
http://os2eagle.net/checksum.htm
Ted Butler silver commentary archive:
http://www.investmentrarities.com/
----------------------------------------------------
COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS
Blanchard & Co. Inc.
909 Poydras St., Suite 1900
New Orleans, Louisiana 70112
888-413-4653
http://www.blanchardonline.com
Centennial Precious Metals
3033 East First Ave., Suite 807
Denver, Colorado 80206
1-800-869-5115
http://www.USAGOLD.com
Michael Kosares, Proprietor
cpm@usagold.com
Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
http://www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net
El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net
Gold & Silver Investments Ltd.
Mespil House
37 Adelaide Rd
Dublin 2
Ireland
+353 1 2315260/6
Fax: +353 1 2315202
http://www.goldinvestments.org
info@gold.ie
Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
http://www.gloomdoom.com
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com
Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com
Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
http://www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com
Lone Star Silver Exchange
1702 S. Highway 121
Suite 607-111
Lewisville, Texas 75067
214-632-8869
http://www.discountsilverclub.com
Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel
Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
http://www.mocoin.com
Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
http://www.buysilvernow.com
Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com
The Moneychanger
Box 178
Westpoint, Tennessee 38486
http://www.the-moneychanger.com
Franklin Sanders
1-888-218-9226, 931-766-6066
----------------------------------------------------
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