Tuesday, 15 May 2012

Investing in Rare Earths

Not as volatile as gold and silver and much healthier than bonds, stocks and shares, REE are a great investment for the discerning investor seeking something more stable yet highly valuable and in demand.
Rare Earths come under the umbrella of Strategic Critical Minerals.
Strategic Critical Minerals (SCM)
Strategic Critical Materials are those minerals that are highly sought after in industry, electronics and the auto field and without which many devices could not operate including planes, cars, TVs, mobile phone in fact practically anything manufactures has one strategic critical element or another.
Included in SCMs are the Rare Earth Elements (REE) also. There rarity of these is in the distribution of them on the planet and the cost of extraction but also the fact that China has a near monopoly on them and their criticalness to the electronics, military and other areas of industry make them an excellent target for private investors if they could only get their hands on them.
SCMs include such minerals as antimony, fluorspar, gallium, germanium, graphite, indium, magnesium and tungsten as well as the rare Earth Elements.
Rare Earth Elements
Rare earths are really rare at all. Most of them (with the exception of the radioactive promethium) are quite plentiful in the earths crust but they are spread out so thinly that it is very difficult to mine them economically.
The main rare earths are:
Lanthanum Oxide
Cerium Oxide
Neodymium Oxide
Praseodymium Oxide
Samarium Oxide
Dysprosium Oxide
Europium Oxide
Terbium Oxide
These are used in various industrial and technological areas such as:
Cobalt Lithium-ion batteries, synthetic fuels
Gallium Thin layer photovoltaics, IC, WLED
Indium Displays, thin layer photovoltaics
Tantalum Micro capacitors, medical technology
Antimony ATO, micro capacitors
Germanium Fibre optic cable, IR optical technologies
Platinum (PGM) Fuel cells, catalysts
Palladium (PGM) Catalysts, seawater desalination
Niobium Micro capacitors, ferroalloys
Neodymium Permanent magnets, laser technology
The Rare Earth Elements (REE) A number of critical applications
In addition China is holding on to what she has got for her own use.
REEs have been on a rising trend for several years and with the continued expansion of the industrial and technological arenas looks set to continue being in great demand for many years to come.
Only recent has it become possible for the individual investor, as well as institutions even, to obtain a selection of 'baskets' of rare earth and strategic critical elements.
These can be purchased and are stored in a secure ultra secure vault, operated by Zurcher Freilager AG who have been in operation since 1923. Its majority stock holder is AXA & Winterhur; one of the most distinguished financial institutions in Europe.
The vault is located within the Entrepot, a tax and duty free zone where your metal assets can be stored without any time limit and the metals can be resold and converted into cash at any time, although a minimum 5 year commitment is highly recommended.

History Suggests Success When Investing in Gold and Silver

A Brief History of Precious Metals
Studying the price history of gold and silver is fascinating. For over a hundred years the value of an ounce of gold was $20 and an ounce of silver $1. Silver historically has a ratio of 20:1 to gold, so eventually it should match that again - meaning the price should increase. At today's gold prices, we should expect that silver would be priced around $80 per ounce. There are various theories on why this is not the case including demand and industry fluctuations, the US leaving the gold standard and market manipulation. No one can be certain why the historic ratio is out of whack but we can infer that the ratio will return to historical averages.
On the other hand, gold has historically equaled the DJIA. If this were to become reality again, either gold will skyrocket or the Dow will crash. In either case, I think holding a mix is a better option because of diversification and to have flexibility if you do need to purchase things in the future using these assets. It will take a strong person to lug a heavy bag of silver into a store to buy a nice TV.
Why not just hand the cashier an ounce of gold instead?
This was standard practice 100 years ago in the United States. Empires dating back to Egypt, Greece and Rome all traded in silver and gold coins. This was a time tested practice. Fiat currency systems are a rather new invention and don't have a good track record economically. Recent failures in the fiat experiment were witnessed in Zimbabwe and Germany to name a few. Because the historical significance of gold and silver is so proven, I recommend that everyone should own some as an investment and safety net.
Ways to Invest in Gold and Silver
Gold seems like a pretty lucrative investment right now considering the coming inflation and slow global growth outlook. So how can you actually invest in gold or silver? There are several ways actually. Just please make sure that you know the spot price of gold if you're buying or selling gold you own or want to own. As of this writing the spot price is about $1642 per ounce. The price fluctuates daily but can be found easily on the internet or in financial newspapers. This means you shouldn't buy an ounce of gold or silver for much more than the spot price (unless it's a rare coin) and you should never sell an ounce of either for much less than the spot. I've heard horror stories of people selling a lot of gold to cash for gold companies and getting a quarter of the weight value back in payment. And the worst part is they're usually happy about it until someone points out it was worth 4 times more.
Please educate yourself so you don't get ripped off. It's easier than you think to invest in gold. The best way to invest is to buy and hold physical bullion. The ETF's are sketchy because it's hard to guarantee that the paper is backed by physical stock of the precious metals. I like to go to coin dealers or coin shows and stock up on pre-1964 coins which are 90% silver or the old gold eagles which you can also get in one, half and quarter ounce weights. You can also buy jewelry, coins, gold bars or other tangible items with gold or silver content.
As a last resort, you can buy a gold, silver or precious metals ETF or mutual fund if you have a brokerage account or buy gold or silver futures on a futures exchange. Trading futures is more risky and requires a lot more capital but is still another way to do it.
Jamie has an MBA from Rutgers University and a Professional Certificate in Real Estate Finance, Investment and Development from NYU. He's traded stocks since he was 13 and bought his first property within a year of graduating college. He also flipped properties and got out before the 2008 mortgage meltdown because he was able to see the market turning before it happened. He's started two companies and also has experience in investing in antiques, collectibles, gold, silver and trading futures.

Investing in Gold for a Secure Future

Since the recession, there have been many people who have lost everything that they have worked for and saved for years at a time. Many of these people believed that the stock market was a fool prop way to invest and in the end lost everything. This does not mean they should not have saved for retirement. What they should have done though is saved in a much safer form.
What these people who have lost everything should have invested in was gold. Gold is one of the most secure investments in the world, because it is one of the only physical investments that you can touch. Gold does not go bad and gold does not become worthless over time. Even during the worst stock market crashes, gold will retain its value.
Gold is normally priced by the ounce. The hefty price that gold bars have can be cut down for those looking to invest less money. One of the most popular ways people buy gold is in the form of coins. US Eagles have become the most common forms of investing in gold along side gold bars, because they come in a wide variation of sizes. The sizes of coins include 1/2 oz, 1/5 oz, 1/10 oz, and 1/20 oz. These fractions of gold go all the way down to the $200 range.
For larger amounts that are being invested, gold bars are the way to go. These bars all weigh 1 ounce and are all.999% gold. Buying these gold bars allows one to have the most secure investment, while it still has growth potential. Gold bars have been used as a popular investment for years. This has and always will be a form of investing that will be found amongst different countries.
If investing in gold bars does not seem like the right investment, then buying silver coins comes in the next choice. These coins are made of the same quality as the gold bars were made, just with silver. The silver market has proven to be a tad more aggressive than the gold market, which has many investors considering that as their investment instead. Silver coins have stood to the side of gold bars for years. Investing in silver is much more affordable and may prove to have a larger payback when retirement comes around.
Investing is the best choice that a person can make. It is literally the definition of building self value. When retirement comes around, having money safely stored away in an investment that never crashed will be the best feeling in the world. Gold is and always will be the best way to invest money for the long run. Gold bars are secure and come in many forms to fit anyone's income.

Silver Investing - The Gold-To-Silver Price Ratio, And Why It Will Return To Its Historic Standard

As silver made its last run up to $50 an ounce in early 2011, it seems someone posted an article every week about the gold to silver price ratio. The gold-to-silver price ratio dropped to about 30:1 at that time. It had been more than double that little more than a year earlier.
I remember only a couple of articles about the ratio in the past year, and the suggestion was that at about a 50:1 gold-to-silver price ratio, it was time for silver investors to once again buy silver. Personally, I think the ratio will go considerably higher before it moves considerably lower. Why?
In short, with 50% of the annual production of silver being consumed by industrial demand, and signs of slowing economic activity worldwide, I believe the price of silver is going to drop even as the price of gold rises. Next, or perhaps simultaneously, inflation sends the price of gold skyward. If I am correct about the magnitude of the price moves, the gold-to-silver price ratio will move much higher than 50:1, maybe as high as 100:1 during this period of time.
When the price of gold reaches levels most will consider outrageously high and unsustainable, many of the middle class of the world will turn to silver to protect their eroding assets value from the ravages of inflation. This is the period of time when the gold-to-silver price ratio will begin moving lower, toward its longtime historical levels.
Why will it move back to the 17:1 range? Because price manipulation will cease, or maybe because of supply/demand forces? Those things will contribute, but they will not be enough. As an example, consider the platinum-to-gold price ratio. It is now less than one; that is; the price of platinum is less than the price of gold. And platinum is 30 times more scarce than gold. Why isn't the price of platinum 30 times higher than the price of gold? By the way, though the price of platinum was higher than that of gold for many years, it was never even double, much less thirty time the price of gold.
The short answer is that platinum does not, and will not have the huge investment demand that gold does. Although platinum is considered a precious metal because of price, it is a commodity, an industrial metal.
Silver has a history of being thought of as a precious metal. And even though it is much more of an industrial metal than gold, investor demand will jump-start the ratio downward. When that time comes, there will once again be articles about the gold-to-silver price ratio. Many reasons will be cited to convince investors that the ratio will revert to the historic norm. But it is not the reasons themselves that will cause the long term ratio to achieved.