dsmWealth March 19, 2020

U.S. $20 gold piece coins minted before 1933 are easy to buy, and they sell for only about 4% over their melt value.

Is Gold a Good Shelter From Current Market Turmoil?

BY STEVE DINNEN

Gold seems to like bad news. On three consecutive days of poor economic news in January, the spot price of gold rose. On the fourth day, when there was good news, gold fell.

Well, these days certainly are trending toward poor, between the rout of the stock market and the economy shuttering over the coronavirus pandemic. So should you now make gold a part of your portfolio, and hope to cash in on pending bad times?

Maybe not.

"It’s actually collapsed," Jerry Koepp, owner of Coins Stamps "N" Stuff, in Urbandale, says of an early March sell-off in gold. Experts say gold owners were actually selling their stakes in order to cover margin calls on stocks that have declined precipitously this past month. So unlike rough times in the past, gold has not shot up dramatically in value. The precious metal has recovered somewhat and now costs $1,529.72 an ounce, a mere 82 cents more than it did when the year started.

Writing in the Economic Times, Value Research CEO Dhirendra Kumar said late last year that gold as an investment makes sense "only for those who have no access to or no trust in the financial system, or expect to be in such a situation." He disfavors ownership of physical gold, preferring instead "paper gold," or mutual funds. Exchange-traded funds (ETFs) might, in fact, be a better play as they carry trading advantages over funds.

Gold-based mutual funds include U.S. Global Investors Gold and Precious Metals Fund (USERX), and its World Precious Metals Fund (UNWPX). ETFs include Van Eck Vectors Gold Miners (GDX) and iShares Gold Trust (IAU). Both of those investment vehicles will own positions in gold and precious metals mining companies. If you wish to go directly to the source, you can always can buy shares in mines such as Barrick (GOLD), Newmont (NEM) or Franco Nevada (FNV).

And if you really want to zero in on gold, talk to Koepp about buying some of the gold coins his firm offers. (There’s no sales tax in Iowa on purchases of precious metals.) Collectors and speculators alike are fond of the Canadian Maple Leaf coin, which contains 1 ounce of gold.

For his money, Koepp prefers U.S. $20 gold piece coins minted before 1933. They have just the right amount of gold in them and currently sell for only about 4% over their melt value, or what the gold content is worth if the coins were to be melted.

Treasury Secretary's Reassurances Rang Hollow

BY STEVE DINNEN

Far be it for a casual observer of the economy in Des Moines, Iowa, to countermand the U.S. treasury secretary, but did he really mean it when he said in a television interview that the nation was not in a recession? Did Steve Mnuchin in fact intend to say that at the precise moment he was speaking, we were in good shape, but that a pandemic-sparked recession was waiting in the car as he exited the studio parking lot?

You can’t indefinitely close bars and restaurants and shut down production lines and not disrupt the economy. You can’t vacate sports arenas, music halls and fully booked convention centers and not expect billions of dollars to evaporate. Airlines are grounding fleets, and casinos (sorry, Prairie Meadows) are closing their doors – cutting off dollars that keep them afloat. Wiping out trillions of dollars of value of investment portfolios has, overnight, unpaved the road to economic prosperity.

Even as Mnuchin spoke, Goldman Sachs was forecasting a 5% decline in GDP in the second quarter. ING cut even deeper, at 8%. A recession is typically defined as two consecutive quarters of falling GDP.

Since I was born, in 1950, we’ve had 10 recessions. The worst was 2007-09, both in length (18 months) and GDP decline, of 5.1%. Let’s hope we don’t eclipse those numbers.

Summer Travel: Where to Go, What to Do — Or Skip It?

FROM CNBC'S GLOBAL TRAVELER

As the coronavirus spreads across the globe, and travel disruptions — from visa cancellations to flight suspensions — increase by the day, many people are wondering what to do about their summer holidays, if anything at all.

Will the situation be worse this summer — or better? Which countries will be safe? And is flying a good idea? As fast as questions are being answered, new ones emerge.

While the decision to travel will hinge upon a variety of factors — from your age and personal risk aversion to your reasons for traveling in the first place — there is no need to completely throw out your summer travel plans yet.

It is, however, time to start thinking strategically about them. >> READ MORE

Why Working From Home Benefits Employer and Employee
BY FINN FALDI FOR ENTREPRENEUR
Off to work? For a growing number of employees, that means rolling out of bed, sauntering over to a kitchen table, and firing up the laptop. Forget about the commute, forget about business attire, forget about office chitchat. This is the emerging face of work in the 21st century.

The benefits of enabling employees to work remotely have been driving a steady increase in its acceptance throughout the U.S. According to FlexJobs, a service connecting telecommuters with employers, more than 4.7 million Americans either worked remotely or telecommuted at least half time by 2018, which is more than twice the number who had done so just 10 years earlier.

However, that now appears to have been just the start. >> READ MORE