Take Steps to Diversify By Debbie Bradley,
October 02, 2008
are increasingly bullish on gold coins as part of a personal
portfolio amid a financial market that is currently in turmoil.
"Diversify," advises Mike Fuljenz, president of
Universal Coin and Bullion. "Take 20 percent of your
money out of the market and put it in gold."
That's the same advice given Sept. 22 by CNBC's Jim Cramer,
host of the "Mad Money" television show, and Fuljenz
thinks he's spot on.
Fuljenz said it wasn't that long ago when he was the "lone
wolf" advising people to put money in gold, which is
hovering around $875 an ounce, and now a mainstream cable
news network is advising the same.
"But don't get wrapped up and send all your money to
a coin dealer," Fuljenz said. "Have balance and
diversification with your stock broker, coin dealer and banker.
Open multiple accounts that are FDIC insured."
It may mean moving your money to five different banks, he
said, but that's what people are doing to make sure they don't
exceed the FDIC levels.
And as good as gold is as an investment, don't go overboard.
"Don't get caught up with anybody telling you to put
50 or 100 percent of your money anywhere unless you're a speculator,"
he said, "because that's not saving, that's speculating."
John Kamin, who has published the newsletter The Forecaster
since 1962, advises investing in gold.
"We've been recommending gold coins since gold was $35
an ounce," Kamin said.
He likes gold for a number of reasons.
"Silence is golden but gold is silent," he said.
"It's private. Nobody needs to know you have it and you
can give it to whomever you want."
The U.S. Mint is allocating 1-ounce American Eagle coins
to dealers and suspended sales of Buffalo gold coins on Sept.
25 because of depleted inventory.
But Fuljenz reminds investors that there are other gold coins
available, such as fractional gold Eagles.
"They may not get the exact denominations they want,
and they may have to pay a little more premium," he said.
Kamin said fractional gold Eagles are selling for about 6
to 10 percent above melt.
"That's affordable," he said.
Fuljenz said there is a silver lining to this all as more
and more people get introduced to coin collecting.
"In 1979 and 1980 people lined up in front of coin shops
to buy or sell gold. What happened is a lot of very moderate
to wealthy individuals were introduced to coin dealers. Those
people became very good coin buyers and investors."
He sees that same thing happening now. People who never bought
gold before are being introduced to precious metals. They
may start buying American Eagles and Canadian Maple Leaves,
but if they like their dealers, they may then get introduced
to $20 gold pieces.
"As long as there is wealth, people will buy coins and
the coin market will be fine," Fuljenz said. "If
we have just a blip in the economy what will happen is a lot
of people with wealth are exposed to the coin market. As long
as we don't go into a major recession or depression, it will
be good for the coin market."
For now, people need to protect against having their money
in an unsafe place and protect against inflation, he said,
and gold will be a safe thing to have.
"People should be cautious and concerned, but the world's
not falling apart," Fuljenz said.