Cryptocurrencies. Interesting? Yes. But They Are Not Gold

OWNx Team Money & Financial Technology

The hype is on. Ethereum and Bitcoin are catching the eye of a wider audience as their prices have risen to new levels. This rise, however, has been accompanied by significant volatility–not the kind of stuff most investors want to deal with.

Even though Bitcoin has been around since 2009, it has only become a relevant player in the currency world over the last two or three years. Some would argue that it still hasn’t gained relevancy.

Regardless, reality is we’re still in the very early stages of a global monetary revolution. That means it’s going to take years for the market to sort out who will be the long-term players in this newly emerging system. There will be spectacular successes, and there will be spectacular failures.

The first products to market (Bitcoin) do not always mean success. Remember the Palm Pilot? In 1997 it was the personal digital assistant. What about Friendster? Maybe you didn’t even know about them. They launched a year before MySpace in a market now dominated by Facebook.

The point is, as many raving fans as Bitcoin and Ethereum have now, you could have found an equally dedicated base of Palm Pilot users. However, innovation continued. Innovation versions 1.0, 2.0, and even 3.0 don’t always survive despite fans and hype. Millions of people learned this lesson the hard way in the dotcom bubble.

This brings us back to gold and silver. They have survived bubbles from tulip bulbs to pets.com. They will always be a stable anchor in any investment portfolio. And for value investors, today gold and silver compare very favorably to a stock market that has risen for eight years, and certainly to cryptocurrencies that haven’t yet found their place in the global monetary system.

Cryptocurrencies are not golden yet. In fact, they would need to become a stable asset for 5000 years before they can claim to be “as good as gold.” Based on where they are today, they have a long way to go.

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Three Steps to Balance Your Investment Portfolio in An Uncertain World

OWNx Team Money & Financial Technology

A Smart, Simple Strategy Can Minimize Risk and Maximize Returns

Back in the day, advisers recommended rebalancing your portfolio every year. In today’s rapidly changing investment world, regular examination of your investment portfolio is a must. Depending on your asset allocation mix, you may want to rebalance every three to six months.

Step #1 Access Your Risk Appetite

  • The degree of healthy risk any one investor is willing to take on depends on many factors.
  • How well can you stomach volatility?
  • How much time do you have before you need the funds you invest?
  • What are your long-term objectives?

Answers to these questions will help you make wise decisions and avoid sleepless nights.

Investors need to consider their time horizon, risk tolerance, long-term objectives, and available capital to develop a strong allocation strategy, as each asset class has different levels of risk and reward. For example, an investor with a short time horizon and low tolerance for risk may feel more secure with a conservative approach, whereas an investor who has a longer time horizon may find an aggressive approach to be more suitable.

Each investor will want to rebalance their portfolio on a regular basis in order to maintain their profile, or change their strategy if their risk appetite changes.

Step #2 Know What You Don’t Know

In other words, be honest with yourself about your knowledge of the markets you’re investing in. More people are taking over management of their investments through online brokerage accounts and self-directed IRA retirement plans. This provides flexibility and control, which is important.

However, the current investing world can be complicated. Technology is moving quickly, disrupting many traditional markets, and of course there is the rise of the ever-volatile cryptocurrency world. Being honest with yourself about your knowledge of the markets will help you avoid investing in areas you don’t understand, and possibly getting caught on the wrong side of disruption or hype. It may mean making a call to a financial advisor – or two.

Step #3 Get it on Your Calendar

This is vital for those who manage their own portfolios. Today’s world is fast-paced, and there are many distractions that could cause you to delay your review. Set aside a specific day (or two) on a regular basis to do two things:

  1. Examine how much the investing landscape has changed. Have macroeconomic or geopolitical events occurred that might impact your allocation strategy? Is more or less risk prudent? Do you need to change your allocation percentages? Get your advisors involved.
  2. Crunch the numbers and rebalance. It’s easy to rationalize leaving things as they are, but if you spend time thinking through #1 and it makes sense to change things, do it.

Precious Metals Play a Role

Physical gold and silver have traditionally been an anchor for any investment portfolio, with an allocation percentage between 5% and 20% depending on risk appetite and global market and geopolitical conditions. In the last thirty years however, they fell out of favor as technology bypassed the industry, simultaneously bringing new assets online. While it became easy for anyone to buy and sell stocks and bonds within an online brokerage account, ownership of physical gold and silver was stuck with 80s technology and a lack of liquidity.

That has changed with the OWNx platform. Dollar-cost average into the gold and silver market until you reach your desired allocation. Buy and sell physical gold and silver as easy as trading stocks and bonds. The OWNx online Dashboard is available to everyone, including for those who choose to hold them within a self-directed IRA.

Understand your risk profile. Know your investing limitations. Set up a schedule and watch your portfolio closely. Then take advantage of today’s ability to bring the time-tested value of gold and silver into your investment strategy with a smart, simple online platform.

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Independence Day – A Time to Pause and Reflect

OWNx Team Blog, Gold & Silver Market, Money & Financial Technology, News & Current Events

As we celebrate the birth of our nation this weekend, we recognize both the challenges and opportunities that lie ahead for each of us and our nation as a whole. Whatever role gold and silver will play in your future, we will be here with timely, relevant news on the gold and silver market and how our financial world is changing.

Have a safe and happy 4th of July weekend.
The OWNx Team

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Gold Continues to Set a Long Term Base – 2017 Chart Looks Good

OWNx Team Gold & Silver Market, Money & Financial Technology, Retirement Planning

As we’ve looked at the gold and silver markets over the past year, we’re encouraged that our view of the metals carving out a long-term base since the end of 2015 is the correct one. The 2017 chart looks especially encouraging.

It has made a series of higher highs and higher lows since December of 2016. This is the kind of price action one can expect after a multi-year decline, as it builds a base for the next multi-year climb. For the smart, patient investor, gold and silver are poised to do well over the next several years.

It’s tempting to chase the broader markets as they reach new highs. One only has to look back to 2007 and 1999 to see that such a strategy doesn’t normally pay off well. There are times to enter markets, and there are times to hold. There are also times to stay on the sidelines.

If you’ve participated in the broader market rally over the last 18 months, that’s great. Prominent investors, such as bond fund manager Bill Gross, offer a word of caution here. In a recent article, he stated that he sees the stock market risk at a level not seen since 2008:“Instead of buying low and selling high, you’re buying high and crossing your fingers.”

Then there are the crypto-currencies,which have been getting a lot of media attention recently. Ethereum and Bitcoin have been on a tear over the last few months. Beware of chasing hockey stick charts, however, as they generally do not end well.

As thinly traded as crypto markets are, sudden price movements are common. Sometimes even extreme movements develop, such as this week on one exchange when the price of Ethereum crashed from $320 to 10 cents before recovering to $296 later that day. This follows a drop from the all-time high price of nearly $400 just last week.

Gold and silver play a very important role in today’s world. They offer a 5000-year history of long-term protection when currencies and markets become volatile. There’s no question that we’re in a window of time where that is happening. Continuing to allocate a portion of your savings to metal seems to be a prudent choice.

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Technology Has Increased the Value of Holding Gold and Silver in an IRA

OWNx Team Money & Financial Technology, Retirement Planning

IRA accounts serve a very specific purpose – to grow and protect long-term savings and investments. With geopolitical and economic trends shifting constantly, you need immediate access to as many of your assets as you possibly can in order to keep up with the changing landscape.

Many people hold assets such as real estate and private equity in their self-directed IRAs. The nature of the processes required to transact in those assets makes them relatively illiquid. It takes time to sell real estate and ownership in private companies. This limits their utility value to being strictly long-term, buy-and-hold investments, which in turn limits who will choose to hold those investments in their IRA.

With a world in rapid transition, holding what were previously believed to be stable, yet illiquid assets, may actually increase risk. You don’t have to go back very far to remember what happened with real estate between 2006 and 2010. It’s likely many people holding real estate in their self-directed IRA would have chosen to liquidate some and rebalance their portfolio if they’d had the opportunity.

Until recently, gold and silver have faced a similar problem. They are viewed as a desired asset to stabilize investment portfolios and provide protection against market volatility. However, the process to move them in and out of self-directed IRAs required a time commitment from the investor, and regularly took two weeks or longer to complete. Illiquidity limited their utility value.

Now that’s changed.

Financial technology is being developed to make access to a wide variety of assets much more simple and streamlined, thus making those assets much more valuable to a wider range of investors.

OWNx has integrated its popular gold and silver savings and trading platform with well- respected IRA custodians. Doing so has drastically decreased the time and hassle required to set up your accounts. However much more importantly, you now have 24×7 access to buy and sell your IRA gold and silver, enabling you to immediately react to changing market conditions. This level of liquidity is unprecedented in the world of precious metals self-directed IRAs.

So, is holding gold and silver in an IRA a good idea? Now that you can have full control over your assets, the answer might just be a resounding “yes.”

Learn more about our smart, simple, and safe self-directed IRA.

If you have any questions, give us a call at 888-519-1213.

 

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Not Satisfied with Your Retirement Plan? You’re Not Alone

OWNx Team Money & Financial Technology, Retirement Planning

Since the days of the late 1990s Dotcom  Bubble and subsequent bursting of that bubble, the investment landscape has been increasingly difficult to navigate. Geopolitical uncertainty, combined with wild market swings, have left a growing number of people dissatisfied with their progress in saving for retirement.

The numbers are telling. In a recent article from madison.com, according to the Employee Benefit Research Institute (EBRI), in 2016, the number of people who were “very satisfied” with their retirement plans dropped by nearly 12% since 1998, from 60.5% to 48.6%.

Many Americans are feeling a need to re-think their retirement plans by either delaying the date they plan to retire, or by re-adjusting their expectations on the lifestyle they will be able to maintain during retirement. The key today then is twofold – proper planning based on the reality of today’s markets, and setting proper expectations.

Increase Your Satisfaction

Having enough income to spend in retirement is important. Today, that requires digging a little deeper in order to learn what works and what doesn’t.

  • Where are tomorrow’s opportunities?
  • Are there practical alternative investments that you should consider?
  • How do you manage risk?

These are all critical questions to ask when building and maintaining a solid retirement portfolio. The answers may mean you will need to re-evaluate your retirement strategy. Is your investment advisor forward-thinking, or do they tend to lean on traditional models? Do you have an avenue to access and manage alternative investments in order to take advantage of new trends and opportunities?

One aspect of retirement satisfaction today is knowing that you have access to a wide variety of assets – and that you can manage them once you invest. It is no coincidence then, that the rise in popularity of self-directed IRAs is happening at the same time that overall satisfaction in retirement is falling. Self-directed IRAs provide an array of assets to choose from when structuring your retirement portfolio, and thus, more flexibility to match a rapidly-changing investment environment.  

At OWNx, we have integrated our technology platform with some of the most respected self-directed IRA custodians in the nation. Our IRA platform enables you to easily buy and sell gold and silver bullion from within your IRA. This empowers you to hold and manage one of the most sought after alternative investments available – all from a simple online Dashboard.

Learn more about opening a self-directed IRA, and how you can own physical gold and silver within it, or, call our IRA customer service at 785-282-7629. They will be happy to answer your questions.

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Why The Price of Bitcoin and Ethereum Matters to Gold and Silver Owners

OWNx Team Blog, Gold & Silver Market, Money & Financial Technology

Bitcoin and Ethereum are the top two cryptocurrencies in the world. Over the past month, their price has risen dramatically, creating a great deal of buzz in investment circles. What does this mean to those who own gold and silver?

The increased activity surrounding these two bellwether cryptocurrencies indicates a broadening base of people who see a future for cryptocurrencies in general. This is a positive sign, as the world begins to rethink payment systems, currencies and how the attributes of money (medium of exchange and store of value) can be managed.

Yet this development also has many traps. The barriers to entry in the cryptocurrency world are relatively small. Nearly every day, new currencies are being introduced through “initial coin offerings” (ICO). Just like an “initial public offering” (IPO) for stocks, ICOs carry a tremendous amount of risk with them. Of the hundreds of ICOs flooding the market, few will find long term success.

A Currency – or Not?

The price volatility of Bitcoin and Ethereum begs the question – aren’t cryptocurrencies supposed to be, well, currencies? By definition that implies they should at least be a stable medium of exchange. Yet the cryptocurrency market looks more like a stock market, and a speculative one at that. So what are they? Where is the “store of value” attribute of money? These are questions that the investment market, along with the money and banking system, will eventually have to answer.

Meanwhile, with cryptocurrencies being in a state of flux and debt based national currencies increasingly coming under stress, there has to be an anchor. Gold and silver have played that role throughout recorded history, across borders and for all currencies. We doubt that this time will be any different.

Cryptocurrencies like Bitcoin and Ethereum will see their prices swing wildly as the world begins the guessing game of who will be the winners and losers in the new world of money and banking. New cryptocurrencies will rise and be touted as the next “sure thing.” Some may succeed. Most will fail spectacularly. Meanwhile, gold and silver will continue to be a safe, tangible store of value while this volatile world of cryptocurrencies sorts itself out.

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gold bullion

Two Noteworthy Developments Related to Gold

OWNx Team Blog, Gold & Silver Market, News & Current Events

The Fed Talks Interest Rates

This week, the Federal Open Market Committee released minutes from their May meeting. Some speculated the minutes would indicate that the Fed was reconsidering hiking rates in June. This thinking created downward pressure on the US dollar. However, the minutes offered little to support that view.

Earlier this month, the price of gold rebounded nicely from a low in the $1,210 range. Now, gold buying has slowed with Fed Fund traders placing an 83 percent chance that the Fed will hike rates in June.

Thus, we are witnessing a continuation of gold and silver being stuck in a range between $1,200-$1,300 and $16-$18 respectively. This range bound trading is likely to continue while global markets seek to understand if the Trump administration is going to be able to implement some of its pro-business policies. Also adding to market uncertainty is whether geopolitical tensions are going to either significantly subside, or escalate.

For those steadily accumulating gold and silver, this price action isn’t a bad thing at all. In fact it allows dollar cost averaging into physical metal at today’s lower prices.

State Legislation on Gold and Silver

On a completely unrelated front, the Governor of Arizona signed into law a repeal of all state capital gains taxes on gold and silver. According to one analysis of the law,

“The bill defines legal tender as “a medium of exchange, including specie, that is authorized by the United States Constitution or Congress for the payment of debts, public charges, taxes and dues.” “Specie” means coins having precious metal content.”

Arizona now has become the fourth state since 2011 to enact laws aimed at enabling gold and silver to be re-monetized. Utah, Idaho, and Texas have also enacted similar bills.

We have long stated that despite the promises of Financial Technology, gold will always have its place in any future monetary system. Passage of these bills continues to support that view.

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Do We Really Want all this Tech? Gold as a Bridge to Reality

OWNx Team Blog, Gold & Silver Market, Money & Financial Technology, Retirement Planning

Artificial intelligence. Robo advisors. Trustless ledgers. Sounds like a world where humans aren’t responsible for doing much. Is this future world really coming?

In some form, yes. All of these technologies are rapidly emerging, and the three mentioned are converging in the investment space at a rapid clip. Investment decisions are being made by computers, purchases and sales of assets are determined by algorithms, and the trades are being recorded on distributed ledger technologies such as the blockchain.

While many people embrace this coming wave of tech, others view this new hyper-tech world as something to keep a wary eye on. Technology is good, yes. But it has its limits.

In his book, “The Revenge of Analog: Real Things and Why They Matter,” David Sax takes a long look at a counter culture that is emerging in an increasingly high tech world. About Millennials in particular he says that though they like their technology , “They are turning to analog to define their individual sense of identity.”

There is a great deal being written about how AI and technology are going to take over the world. Self-driving cars. Augmented reality. The internet of things. Are all of these commentators missing the fact that as human beings, we have an innate desire to work, to create, and to interact with our world in ways that go beyond virtual reality? Is there really a backlash growing against all the hype?

David Sax thinks so. And in some ways, so do we. As the investing world moves toward digital everything, we like to help people stay in touch with something tangible. Real, physical gold and silver are certainly wise to hold for their investment properties. However, it’s also nice to know that if you want, you can actually hold them in your hands. Owning gold and silver coins and bars can assure you that in this high-tech digital investing world, there is still a bridge back to reality.

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Gold Will Always Shine in our Complex World

OWNx Team Global Finance and Economics, Gold & Silver Market, News & Current Events

Gold continues to show just how important of a role it plays in today’s complex, modern, global, geopolitical, and financial world. After reaching a high near $1,300 per ounce last month, it retraced some of those gains, falling back to near $1,200 last week. A slight ease in the war of words between North Korea and the United States, along with a strengthening dollar helped increase selling pressure.

What a difference a week makes. Domestic political uncertainty has cast doubt on the ability of Congress to pass, what was perceived as, a “sure thing” pro-business agenda. The resulting weakness in the US dollar has driven gold to over $1,250 as of this writing.

This price volatility is not surprising given the present domestic and geopolitical environment, as well as continued concerns about the long term health and stability of the global financial system. In such an environment, we will likely see periods of wide swings in the price of gold and silver. So, what should one do about it?

Always consult with your financial advisor on the proper allocation of physical gold and silver in your portfolio. Then, within those guidelines, it may be a good idea to steadily accumulate gold and silver each month. Set aside some additional cash, if you’d like, and make one time purchases of gold and silver on significant price drops. 

The OWNx platform provides you with the tools necessary to accumulate your gold and silver. But buying gold and silver is only half of the equation. Just as important is the ability to sell your metal when personal circumstances or market conditions warrant it. With our platform, you can do this 24X7 from your online Dashboard. Manage your personal holdings, as well as those you may have set aside within a self-directed IRA to protect your long-term investments.

In this rapidly changing world, you need tools that enable you to manage your physical gold and silver. Because for the foreseeable future, market volatility will be the new norm. 

 

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