Investing

Investing

MoneySense Magazine Article

5 months ago
by craigr in ,

The September/October 2011 edition of MoneySense Magazine in Canada has a column on the Permanent Portfolio strategy with excerpts from my Canadian Couch Potato interview. Be on the lookout for it in your mailbox or newsstand if you live up North.

Canadian Couch Potato Interview Part 2

5 months ago
by craigr in ,

Part 2 of my interview with the Canadian Couch Potato.

 

 

Canadian Couch Potato Interview

5 months ago
by craigr in ,

The Canadian Couch Potato (aka. Dan Bortolotti) did an interview series with me about the Permanent Portfolio concepts. He has been nice enough to post his interview on his site and there will be an article about it in Money Sense Magazine in Canada shortly. Here are the first two parts of his series for your reading pleasure:

Introducing the Permanent Portfolio

Peering into the Permanent Portfolio: Part 1

Thanks Dan for the interview. I enjoy sharing my experiences with this investment strategy and discussing this topic with other advocates for low cost passive investing like yourself.

East Coast Earthquake – Another Case for Geographic Diversification

5 months ago
by craigr in ,

Thankfully the earthquake felt on the East Coast was relatively minor by most standards. Yet it could have been much worse and some seismologists think that New York City is well past due for a big one:

NYC Past Due for an Earthquake

One of Harry Browne’s pieces of advice was to store your money geographically diversified, preferably overseas. While many may think this is for tax evasion (which is illegal and should never be done), the reality is it serves completely legitimate purposes. Not only are terrorist acts against US and international financial centers possible (and happened in the past), but other disasters can also make accessing your money difficult if you have it stored in one place. Earthquakes, massive power failures, hurricanes, cyber attacks, etc. are all a threat.

Today’s near miss with a major earthquake is just the latest example why you should not keep all your money at one institution and should spread it around outside of the country where you live. The NY financial district did not shut down, but a bigger earthquake could have been a major disaster. Yes I’m aware that banks, etc. have hot backup sites. But do you really want to be the crash test dummy in a major disaster when you have enough else to worry about? Me neither. If you have your money spread geographically you can still access some part of your funds while the other portions are being sorted out. This can be a big relief in an emergency knowing you aren’t locked out of 100% of your money.

This part of Harry Browne’s advice has become harder to do the past few years, but is not impossible if you research your options. Keeping all your assets at a single financial institution may be simpler, but you open yourself up to new kinds of risks by doing so. This isn’t to say that you should split your money up into tiny slices and spread it around like a squirrel. But having your investments split between two institutions is not a bad idea. It’s a even better idea to make sure those institutions are separated by many thousands of miles and a border.

Fake Gold?

5 months ago
by craigr in ,

An interesting discussion came up on the forums about spotting fake gold coins:

Verifying Gold Coins are Real?

I talked about this in the Gold FAQ but thought I will go over the points again here.

First of all, understand that as gold prices go up the incentive to make fake gold products goes along with it. With gold at very high prices today it is possible that fake gold products could start showing up.

In the FAQ I wrote I even link to a Chinese company that produces gold plated tungsten products that will have near the density of real gold and would likely fool traditional tests such as weight and dimensions:

China Tungsten Alloy

This kind of product could likely fool many people unless they have access to specialized analysis equipment.

So what can you do to prevent buying fake gold bullion?

  1. Use a simple measuring device like the Fisch Tool, or a Gold Coin Balance. These tools check the dimensions of common coins and the weight. A fake coin will not likely have the density of real gold so it will be difficult to pass these quick checks. I have used the Fisch tool and it works quickly and efficiently but is expensive. The Gold Coin Balance tool looks new and I will test one soon, but the principle looks the same as the Fisch tool for significantly less money. 
  2. Don’t buy any gold bullion off of places like E-Bay and definitely nothing out of Asia. E-Bay has many fraudulent items for sale (not just gold) and is basically full of con artists. Ordering gold out of places like Hong Kong or mainland China is just asking to get ripped off. 
  3. Only buy from well established coin dealers (check the FAQ). It is unlikely these dealers are going to allow fake gold bullion to enter their inventory. This is another layer of protection for you and is worth the small premiums they charge. 
  4. If a deal is too good to be true it probably is. Anyone selling gold for below market spot price is probably a con artist. 
  5. Stick to well-known gold bullion coins like American Eagles, Canadian Maple Leafs or South African Krugerrands. They are well established and known by dealers who sell them.
  6. Don’t buy collectable coins or numismatic coins. There is more incentive to fake “rare” coins to sell to people that don’t know any better. Collectable coins are almost always a complete waste of money as they contain little precious metal content. 

If you want to check your coins yourself you can get a digital scale and calipers and measure them using this table:

Coin Specs

Fake gold coins are certainly possible, but not very likely if you follow the above advice. 

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