The Inbox: Your Latest Questions, Answered

Before I get to reader emails, here are a few fascinating facts about our interconnected digital world.

According to a recent report from the research firm Radicati Group, more than half of the world’s population used email in 2019. The number of worldwide email users is expected to grow to over 4.3 billion by the end of 2023. The total number of business and consumer emails sent and received per day exceeded 293 billion in 2019 and is forecast to grow to over 347 billion by the end of 2023.

Let’s face it, several billion of those emails sent every year are utterly worthless. The world is awash with digital detritus.

In contrast are the reader emails that I find in my inbox. Generally speaking, most of your electronic letters are informative, well-reasoned and worthwhile. Let’s get to a few recent and notable emails from readers.

Investing in bullion (without the bull)…

One reader expressed an interest in buying physical gold and pointed out his misgivings about gold-linked exchange-traded funds (ETFs):

“Gold ETFs can be good investments, but they confer many risks. For example, you must rely on a counterparty to make good on your investment. If the fund’s management, structure or chain of custody break down during a crisis, your money is at risk.” — Thomas H.

The chances of those events occurring are scant, but Tom raises an interesting point. The major motivation for owning gold is protection from risk, but a gold ETF or mining stock is part of the financial system you’re trying to hedge against.

Today’s worsening dangers make it worth considering the purchase of physical bullion. Gold prices have been on a tear and I think they have further to run.

Why physical gold? Here are three key reasons:

1) The yellow metal maintains its intrinsic value despite a government’s ability to back its currency. If your country’s currency implodes, you’ll still be able to spend your physical gold.

2) Gold is universally accepted around the world, without the need to convert it into the local currency. It can be bartered anyplace at any time.

3) If there’s ever an economic crisis and banks freeze individual accounts, a physical gold investment can always be accessed.

Gold is a classic safe haven and this year is likely to be turbulent. However, the conditions that are favorable for gold will prove fatal for overvalued stocks that are looking for a trigger to tumble.

Gold also is a time-tested hedge against inflation, which is showing signs of life. The U.S. Bureau of Labor Statistics reported Tuesday that the consumer price index (CPI) rose 0.2% last month. Consumer inflation for all of 2019 reached 2.3%, the highest level since 2011.

Remember, diversification is crucial to any investment strategy. As a fraught 2020 unfolds, consider re-balancing your portfolio to accommodate the likely economic, business and market volatility ahead. You can hedge your bets, with physical bullion.

Consider these six reputable dealers:

American Precious Metals Exchange. Based in Oklahoma City, Oklahoma, APMEX carries a broad selection of pre-1933 classic U.S. gold coins.

Asset Strategies International. Headquartered in Rockville, Maryland, ASI also offers convenient options for you to store gold beyond U.S. borders.

Camino Coin. Based in Burlingame, California, Camino has been in business for more than a century.

David Hall Rare Coins. Based in Newport Beach, California and in business since 1977, DHRC deals in gem-quality coins, including gold rarities. The firm can assist you in building collections that make an enjoyable hobby.

EverBank. Headquartered in Jacksonville, Florida, EverBank traces its origins to the 1960s. In 2006, Everbank started offering vaulted gold online to private investors.

Kitco. With offices in New York, Montreal, and Hong Kong, this Canada-based company buys and sells precious metals such as gold, copper and silver. It also operates a website for gold news, commentary and market information.

The race to implement 5G…

Please advise on a rebalancing strategy for 2020. You have consistently recommended companies geared toward 5G technology. Which fund(s) are aligned with taking advantage of 5G tech?” Faith F.

The implementation of 5G wireless technology is a mega-trend that will make early investors rich.

Read This Story: 5G: The Fight for the Future

An ETF that comes close to being a play on 5G would be the Technology Select SDPR (XLK).

XLK seeks investment results that generally correspond to the price and yield performance of companies in the Technology Select Sector Index. The fund is skewed toward large-cap blue chips and is considered the benchmark for the technology sector.

But there are caveats with this approach. For starters, to profit from the global roll-out of 5G, you’re better off taking a targeted approach with individual stocks, rather than a broad-brush fund approach.

Secondly, whereas 5G implementation is a recession-resistant technology trend, the tech sector as a whole will probably wane during this late stage of the economic cycle. For our favorite specific plays on 5G tech, click here now.

The retirement crisis…

“As I approach 65, with divorce and some poor deals, I do not have what I feel I need to retire. I would like to build up my savings, despite knowing there are no sure things. I would like some advice to start good saving right away. Even with no guarantees, I’d like to try! Thanks for listening.” — Dr. Malcolm M.

You’re not alone in your predicament. Statistics show that most Americans will outlive their retirement savings.

According to a recent report from the World Economic Forum, American workers are woefully unprepared for retirement, with the average 65-year-old saving enough to cover less than a decade of costs.

The average U.S. man faces a savings gap of 8.3 years, while women, who live longer, face a gap of 10.9 years. The report found that the U.S. will have the world’s largest savings shortfall at $137 trillion by 2050.

Now, the good news: The experts at Investing Daily can enhance your financial security, so you don’t have to worry about going broke in your senior years. Consider my colleague Jim Fink.

Jim Fink is the chief investment strategist of Options for Income, Velocity Trader, and Jim Fink’s Inner Circle.

With Jim Fink’s trades, you don’t have to worry about headline risk. That’s because his proprietary trading methods have been proven to generate profits in bull or bear markets, in good economic times or bad.

Over the past 50 months, Jim’s trades have racked up a “win rate” of 84.68%. That’s unheard of for most investors, in any asset class.

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John Persinos is the managing editor of Investing Daily. You can reach him at: mailbag@investingdaily.com