Jason Brizic
May 6, 2011
You should have 20-30% of your non-house net worth in precious metals. They are a hedge against massive price increases and hyperinflation. I consider price increases of 10-20% per annum to be massive. I consider hyperinflation price increases above 20% per annum. Entrepreneurs can't calculate in an environment where prices increase above 20% per year. The division of labor begins breaking down in the 20-30% range.
The precious metals (gold and silver) are a hedge against massive price increases. They are not a hedge against low inflation. Just look at precious metal prices from 1980 - 2000 for confirmation. Silver took a beating this week. It was down 29%. Gold lost 6%. Silver is more volitile than gold.
I think you should use 80% of your precious metals money to buy gold coins from your country's mint. Buy 1 ounce and tenth ounce coins. Buy 20% silver coins. Buy 1 ounce silver coins and junk silver coins.
I think gold under $1,400 per oz. and silver under $30 per oz. will be good buys. Don't buy gold and silver ETFs like GLD and SLV if you don't own any physical coins.
Buy from where ever you are comfortable: local coin dealers, EBay, Amazon.com, or my favorite www.apex.com .
For more tips, go here:
http://www.myhighdividendstocks.com/category/tip-of-the-week
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