The 5 Best Ways to

Invest in Gold

Daily Reckoning
THE
TRADE
THE DECADE
Daily Reckoning
THE 5 BEST
WAYS
TO OF
INVEST
IN GOLD

Daily Reckoning Exclusive Report:

The
Best Ways
to Decade
Invest in Gold
The5Trade
of the
A
Short
forthe
Preserving
Your Wealth293%
Our
lastPrimer
Trade of
Decade skyrocketed
heres the single move to make for THIS decade.

www.dailyreckoning.com

ADDISON WIGGIN

The ultimate dollar hedge investment will always

be gold. Investing in gold through ownership of
the
metal
itself, mutual funds, or gold mining stock
Dear
Reader,
provides the most direct counter to the dollar. As the
Studiesfalls,
have
shown
allocation
are
dollar
gold
will that
inevitably
rise. decisions
In a moment,
whatprovide
make oryou
losewith
the many
most money.
well
ways forIndividual
positioning
choices

selecting
individual
stocks
or bonds

your portfolio to profit from a bull market

in gold.
do not
seem
to make much
difference
in the
For
now,
we emphasize
the high
probability
oflong
golds
run. But
deciding
which market
to be
and
when
future.
The
real potential
for profits
inin
the
coming
makes
the difference
in the
years
and all
decades
is not going
to world.
be found in the
traditional American blue chip industry. That is
An
investordinosaur
would have
well
overcompete
the past 40
a
financial
that done
can no
longer
years
pay market.
attention to his investments on the
in
the to
world
first day of each decade and otherwise ignore
the urge
to growth
play around
with
money.
The
future
is going
to his
be seen
in gold. The
world economy may remain off the gold standard,
He could
have the
made
four simple
but
ultimately
tangible
value decisions
of gold as and
the baturned
an
original
grubstake
of
$10,000
into
sis for real value-whether acknowledged by central
$297,600.
Ill show
you proof
in Historically,
just a minute.
Then
banks
or not-will
never
change.
this
has
at
the
end
of
this
report,
youll
receive
the
single
always been the case, and it always will be. In other
best trade
decade.
Its surprisingly
words,
we for
are the
on a2010
gold
standard
in spite of the
simple
to
act
on.
And
once
set
up,
youll
be able to
popularity of fiat.
sit back and relax enjoying the government and
economy folly as it unfolds. But before I let you
in on the play, let me show you how powerful the
Trade
of themany
Decade
idea can be
You
have
choices.

Allthe
an investor
to do wasyoull
recognize
thatfive
by cutIn
followinghad
paragraphs,
discover
ting
the
link
to
gold
in
the
early
1970s,
the
Nixon
ways to invest in gold. Based on your level of maradministration
practically
guaranteed
inflation
ket
experience and
familiarity
with products,
one
and
a
higher
gold
price.
Gold
traded
at
an
average
of these will be appropriate for you.
of $36 per ounce in 1970. Ten years later, the same
1.
Direct
nothing
like goldno
ounce
of ownership.
gold sold forThere
$615.is
With
no leverage,
bullion,
the
ultimate
expression
of
pure
value.
stocks, no further research, no headaches
and very
Historically,
many
civilizations
have
recognized
little risk, he would have made a profit of 1,608%.
the
of golds
value.
For example,
Andpermanence
he would have
paid not
a penny
of tax on his
Egyptian
civilizations
investment
during theburied
period.vast amounts of
gold with deceased pharaohs in the belief that
But then,
1980,
Our
they
wouldon
beJan.
able1,to
use itthings
in thechanged.
afterlife. Great
investor
should
have
taken
notereasons,
that nothing
wars
were
fought,
among
other
to pil-lasts
forever
andofthat
there
was
new man
the Fed.
lage
stores
gold.
Why
theaallure?
Theatanswer:
Paul Volcker
meant
He its
would
drive
down
Gold
is the only
realbusiness.
money, and
value
cannot
be
changed
or
controlled
fiat-the It
inflation
rates
and goldby
government
one way or another.
underlying
reason
for
governments
to
go
off the
was time to sell. But where to put the money?
gold standard, unfortunately. Golds value will rise
Our investor
not have
noticed
demand,
they do not
based
on the might
pure forces
of supply
and
advertise
but Japan
Inc. regardwas exno
matterthese
what things
Mr. Greenspan
decrees
tremely
energetic
ingreenbacks
the early 1980s.
He could not
ing
interest
rates or
in circulation.
havebig
known
at the time,
but had gold
he bought
The
disadvantage
to owning
is that Japait
nese stocks,
hewith
would
havespread
seen his
fortunebid
multends
to trade
a wide
between
tiplyask
again.
TheSo
Nikkei
Index
rose from
and
prices.
dont225
expect
to turn
a fast 5,994
profit.
at the buy
end at
of retail
January
38,916 at the
of
Youll
and1980
sell to
at wholesale,
soend
youll
1989

an
increase
of
549%.
need a big price jump just to break even. However,

you should not view gold as a speculative asset,

but a defensive asset for holding value. Since your
dollars
going
fall
in value,
gold
is the
best
Had he are
looked
at to
the
facts
on New
Years
Day
1990,
place
to preserve
value.
The
bestfor
forms
for gold
he would
have seen
it was
time
a change.
On
ownership
through
coins:
one-ounce
that day, heare
should
haveminted
brought
his money
home
South
African
Krugerrands,
Canadian
Maple
Leafs,
to the United States and invested it in U.S. stocks,
or
At American
12.4 timesEagles.
earnings, with the Dow at 2,586,
American equities were a good deal. Besides, there
2.
Gold
funds.ready
The recent
explowere
78exchange-traded
million baby boomers
to spend
sion
in exchange
traded
fundsand
(ETFs)
presents
an
and invest
as never
before
a friend
at the
even more interesting way to invest in gold. An
Fed, Alan Greenspan, ready to make sure they had
ETF is a type of mutual fund that trades on a stock
money to do it. Over the next 10 years, the Dow
exchange like an ordinary stock. The ETFs exact
rose to 11,041, for another 426% profit.
portfolio is fixed in advance and does not change.
Thus,
two
gold
ETFsIm
that
trade
in the
United
Thatsthe
well
and
good,
sure
youre
thinking
States
both
hold
bullion as their
one and
only
by now,
but
isntgold
cherry-picking
historical
should
asset.
locate
thesea two
ETFs
under the
havesYou
andcan
would
haves
bunch
of Monday
symbol
GLD
(for the streetTRACKS Gold Trust)
morning
quarterbacking?
and IAU (for the iShares COMEX Gold Trust).
Either
ETF word
offersanswer:
a practical
In a single
Yep.way to hold gold in
an investment portfolio.
So we sought to test the ideas, proactively, our3.
GoldTo
mutual
Foron
people
who
areour
hesitant
selves.
do it,funds.
we went
record
with
own to
invest
gold, but
still desire
some exposure
Tradeinofphysical
the Decade
in 2000.
We published
the
to
the
precious
metal,
gold
mutual
funds
provide
simple, single trade in our daily e-letter,The Daily
a
helpful alternative.
These
funds
hold
portfolios
Reckoning,
and in what
turned
out
to be
ourNew
of
gold
stocks-that
is,
the
stocks
of
companies
like
York TimesNo. 1 best-selling bookFinancial ReckNewmont
oning Day.Mining that mine for gold. Newmont
is an example of a senior gold stock. A senior is
a
large,
well-capitalized
hasbuy
been
The
trade
was simple in company
2000: Sell that
stocks,
gold.
around several years and has a profitable track
Bill Bonner,
ofThe
Daily Reckoning,
exrecord.
Theyfounder
tend to own
established
mines that
plains theknown
reasoning
of the of
trade:
produce
quantities
gold each year. For
many investors, selection of such a company is a
Whatmoderate
we were looking
for were the
We
more
or conservative
playextremes.
(versus pickwanted
to buyshares
thingsinthat
had
beencompanies).
so beaten
ing
up cheap
fairly
young
down for such a long time that they almost had to
4.
gold
level
of stock
more
goJunior
up. And
we stocks.
wantedThis
to sell
things
that is
had
been
speculative.
are lesswere
likely
to own
going up for Junior
so longstocks
that people
sure
they
productive
and may be exploration playswere going mines,
up forever.
with higher potential profits but also with greater
In 1999,
gold
was perfect for
the buy
side.
It had
risk
of loss.
Capitalization
is likely
to be
smaller
beencapitalization
going down for
whilestocks.
other This
asset
than
of 20
theyears
senior gold
classesofand
money substitutes
soared.
On the
sell
range
investments
is for investors
whose
risk
side, stocks
were perfect.
The accept
Dow had
going
tolerance
is broader,
and who
thebeen
possibility
of
losses
exchange
for the potential
upgold-based
since 1982
and in
prices
had reached
levels that
for
triple-digit
gains.
could
be sustained
only by delusions and hallucinations.
5. Gold options and futures. For the more sophisticated
and experienced
investor,
options
allow
you
It turned
out to be a good
plan,
observes
colto
speculate
in
gold
prices.
But
in
the
options
marleague Merryn Somerset in a recentFinancial
ket,
you can speculate on price movements in either
Timesstory.
direction. If you buy a call, you are hoping prices will
In 2000,
could
buy an ounce
for $280
rise.
A callyou
fixes
the purchase
price of
so gold
the higher
that
continue

Daily Reckoning TRADE SECRETS FROM TWO INVESTING LEGENDS

price goes, the greater the margin between your fixed

option price and current market price. When you buy
a put, you expect the price to fall. Buying options is
risky, and more people lose than win. In fact, about
three-fourths of all options bought expire worthless.
The options market is complex and requires experience and understanding. To generalize, options
possess two key traits-one bad and one good. The
good trait is that they enable an investor to control a
large investment with a small, and limited, amount
of money. The bad trait is that options expire within
a fixed period of time. Thus, for the buyer time is the
enemy because as the expiration date gets closer,
an options time value disappears. Anyone investing in options needs to understand all of the risks
before they spend money. The futures market is far
too complex for the vast majority of investors. Even
experienced options investors recognize the high risk
nature of the futures market. Considering the range
of ways to get into the gold market, futures trading is
the most complex and, while big fortunes could be
made, they can also be lost in an instant.
We cannot know, predict, or even guess, when the
demise of the dollar is going to occur, or how quickly
it will take place. But we do know it is going to occur.
The tragic mismanagement of monetary policy by
the Fed over many years has made this inevitable.
Removing the U.S. monetary system from the gold
standard was not merely a decision of short-term
effect. Nixon may have seen the move as a means for
solving current economic problems, but it had longlasting impacts: trade deficits, growing federal debt,
and the ability to print money endlessly and build a
new credit-based economy. Internationally, the decision by the United States virtually forced all other
major currencies to also go off the gold standard.

www.dailyreckoning.com

Any investor who views the economic situation

broadly-both domestically and internationallycan see that trouble lies ahead. We have delayed
the inevitable because China is a partner in our
monetary woes.
The Chinese are building their own debt on the dubious foundation of the U.S. dollar, and other Asian
economies have been forced to go along for the ride.
When the dollar falls, many other countries will suffer
as well. The offset, logically, is found in commodities.
Investing in oil stocks makes sense, for example,
because the price of oil is rising and as it becomes
more difficult to drill oil those companies that own
drilling and exploration operations will benefit. It
makes sense to invest in other commodities as well.
The tangible asset play is clearly where future value is
going to lie. With Chinas never-ending need for coal,
iron ore, tungsten, copper, oil, and other metals, the
future of tangible markets is the bright spot in the

gloomy financially based economics of the world.

Leading the charge is gold. It is ironic that monetary
policy follows a predictable pattern.
Governments overprint money and their currency
crashes. Inevitably, they always return to gold, but often at great expense and with considerable suffering.
We find ourselves in another one of those moments
in time where irresponsible monetary policy has put
us at risk. But we dont have to simply hold on and
wait for the demise of the dollar; we can take action
now because that demise is great for your portfolioif you position yourself in tangible assets rather than
in empty fiat promises and the bizarre economic
premise of U.S. monetary policy.
Goods and services can be paid for only with
goods and services. Currency is nothing but an
IOU, a promissory note that is not backed up with
any tangible value. Once we reach our national
credit limit, monetary policy will be forced to
retreat. When that happens, traditional investors
and their savings accounts are going to be hit hard.
The beneficiary of the falling dollar will be the investor whose holdings emphasize tangible value
of goods: resources and precious metals.
Every danger to one group of people is invariably
an opportunity to another. It all depends on where
you position yourself. Those investors positioned in
dollar-based investments are going to suffer the loss
of purchasing power when the dollars value disappears. Those who have moved their investments to
higher ground will benefit from the change.
Regards,

Addison Wiggin
Executive Publisher,
Agora Financial, LLC
P.S. What to Expect in 2013
Between 20042007, Bill Bonner and Addison Wiggin
did their best to alert their loyal readers to the dangers
of the housing bubble well before the mainstream
said anything about it.
Well, today, they see something even worse looming just over the horizon.
Its not often our Reckoner-in-Chief agrees to
appear on-screen, but this was just too important.
Click here to see what theyre talking about now