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Joseph Slife

Joseph Slife

Writer/researcher

Joseph Slife has been a news writer for the Associated Press, a college instructor, and a radio host.

From 1990 to 2003, he was a writer/researcher for Larry Burkett at Christian Financial Concepts and Crown Financial Ministries, and he served as the executive producer for CFC/Crown Radio from 2000-2005.

He first joined SMI's writing team in 2008, before going on to serve nearly six years as senior producer/co-host for WORLD Radio. He returned to Sound Mind Investing in 2017.

Joseph and his wife Joye have three grown sons.

Most Recent Articles

Money Roundup: The Counterintuitive Market, an Extraordinary Turnaround, and More

We're posting this week's Roundup a day early. Tomorrow, look for our monthly DAA and Sector Rotation updates.

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A Primer on Buying Gold Bullion

Gold has a centuries-long history of serving as money because of several key characteristics: it is durable, scarce, divisible into smaller units, easily transported, and readily hidden or stored.

As discussed in this month’s cover article, we think the best approach for most SMI investors is to invest in gold using the guidance provided by our DAA strategy. But some investors may desire to have a small amount of physical gold in addition to their DAA holdings.

The more concerned a person is about the debasement of the U.S. dollar, the more attractive owning some amount of the actual metal becomes. With that in mind, here are three ways to buy physical gold. (Because owning physical gold is more involved than trading a gold ETF, the options described below are best suited for longer-term holdings.)

Gold coins

For most investors who want a relatively small amount of physical gold, we recommend buying coins over bars or digital gold (discussed later). Investors often wonder which type of coin is best, but the answer is really any of them, because you’re paying for the actual gold content with any such coin. That content just happens to vary slightly from type to type. (We’re excluding from this discussion numismatic — i.e., collectible — coins. Their value depends on their rarity and condition rather than their gold content.)

A South African Krugerrand, for example, contains one “troy ounce” of gold (precious metals usually are measured in troy ounces; a troy ounce weighs about 10% more than a regular ounce). A Krugerrand actually weighs more than one troy ounce due to the addition of a small amount of copper to add durability. As a result, the coin is only 91.67% pure gold (22 karats).

Don’t let that confuse you — a Krugerrand (named for 19th-century South African leader Paul Kruger) still contains a full troy ounce of gold. As the table shows, while fineness of the Krugerrand is lower than the prettier (due to its purity) Canadian Maple Leaf, the gold content in the two coins is nearly identical. These are best left to those with specialized knowledge and experience. (Both Krugerrands and Maple Leafs are available in silver versions as well.)

Pure gold coins, such as the Maple Leaf, the American Gold Buffalo, and others from various countries, normally sell at higher premiums due to their popularity. So be aware of this as you evaluate the options. (The premium is the difference between the spot price and the price dealers charge — in other words, their markup.) American Gold Eagles, although not pure, also tend to be popular enough to command high premiums. Krugerrands usually are the best deal in terms of actual gold per dollar spent, sometimes dramatically so.

As a general rule, the smaller the coin, the higher the markup over the spot price. (The “spot” price, which can change minute-by-minute, is the current market price of gold where it is being sold for cash and delivered immediately. The terms “spot price” and “cash price” are used interchangeably.) A 1 oz. coin typically will have a lower markup than a ½ oz. coin, which will be lower than a ¼ oz., and so forth. The smallest generally is a one-tenth ounce coin, which will normally carry the highest markup over gold’s spot price. This is because smaller coins aren’t as profitable for dealers, so they charge a larger premium to compensate.

The most popular gold-bullion coins are shown in the table below. Under normal conditions, premiums for 1 oz. gold-bullion coins are in the 2%-4% range, but lately some markups have topped 6% as the demand for coins has increased and supplies have dwindled. At times, demand may be so heavy that certain coins are unavailable.

As you begin your price research, you need to know at least three important things about the market for gold-bullion coins:

  • Gold coins can be sold by anyone. Dealers are not regulated, and there are no licensing requirements. So it’s “buyer beware” all the way.
     
  • Gold coin prices aren’t standardized. This means it’s not uncommon for inexperienced investors to overpay. Make sure the price you pay is competitive (i.e., shop around!).
     
  • Gold coin prices fluctuate throughout the day along with the spot price of gold. On a volatile day, this can make it challenging to compare dealer prices for the same coin. It’s better to focus instead on a dealer’s premium, which doesn’t change as frequently.

Importantly, you don’t necessarily want to use a dealer offering a significantly lower price than everyone else! Focus on reputable dealers offering reasonable prices instead. Monex and Fidelitrade are two good places to start your search.

Gold bars

Gold bars tend to be more complicated to buy and harder to resell than gold coins, so we don’t consider them as attractive as coins. An exception would be if you intend to make a substantial purchase.

The standard industry unit for gold bars is 10 troy ounces. At current price levels, that would be about $18,000 per bar. Bars sell at a smaller premium (i.e., markup) than coins do, so there’s an opportunity for some savings when making a sizable investment.


(Click Chart to Enlarge)

Digital gold

“Digital” describes the method of making transactions. You take direct ownership of actual physical gold

by making purchases online via a brokerage-type account set up with a digital-gold company. The company stores your gold holdings in secure vaults. Your online account shows how many grams or ounces you own, along with any cash balance available to make additional purchases (you can add cash to your account via a bank transfer at any time).

Buying gold in this way is as convenient as using an online brokerage account to invest in stocks or mutual funds. However, making sense of the account statements can be tricky and the monthly storage fees add up.

There are several players in the digital gold market, but the leaders are GoldMoney (which SMI has reviewed before), SmartMetals, OneGold, and the United Precious Metals Association (UPMA).

Here are the main features of GoldMoney’s service — details may vary at other firms:

  • Ownership Rights
    The gold in your account is legally your gold held in your name.
     
  • No Counterparty Risk
    Your direct ownership rights mean you are not dependent on GoldMoney’s financial solvency for protection. If for any reason the company failed, your gold would be delivered to you.
     
  • No Minimum Purchases
    You can buy and store in amounts that fit your particular strategy (whether little or much). This ability to make “fractional” purchases frees you from the standard denominations found with gold coins/bars, and makes the accounts ideal for dollar-cost-averaging.
     
  • Low Commissions
    The fee for each purchase or sale is 0.5% of the transaction amount (or 1% if you use a limit order).
     
  • Storage Fees
    The gold is stored in your choice of high-security vaults (located in North America, Europe, and Asia). The fee for this is as low as 0.12% of the value of your gold holdings per year, but the minimum is $10/month (includes the cost of insurance).
     
  • Fully Insured
    All metals holdings are insured against theft through a policy with the well-established Brink’s Company (Brink’s also handles vault security).
     
  • Regular, Mandated Audits
    Quarterly reports from the vault operators and database auditor (companies independent from GoldMoney) verify that the amount of gold shown on your statement is, indeed, in the vaults. Further, a “Big Four” accounting firm (KPMG) provides an annual audit and report.
     
  • Option of taking physical possession
    At any time, you have the option to pick up your gold from a vault or have it delivered to you (fees may apply).

These services have a lot of appeal. However, be sure to carry out your own careful investigation of GoldMoney (or any of the other digital gold companies) to gain a satisfactory comfort level.

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When a Financial Storm Hits Home

The financial side effects of COVID-19, like the disease itself, have ranged from mild to devastating. Most workers who still have jobs have experienced minimal disruptions. But for millions of unemployed people and many thousands of business owners, the effects have been severe — and continue to unfold.

The CARES Act, signed into law in late March, has helped by providing direct cash payments to most Americans and expanded benefits for the unemployed. But assistance from Uncle Sam isn’t enough when a financial crisis hits home. You likely will need to take additional actions to weather the storm. These suggestions will help you batten down the hatches.

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Feel Free to Copy and Distribute Our May Cover Article on Trusting in God’s Faithfulness

Several SMI members have responded enthusiastically to Austin's encouraging piece, Trusting God to Work Things Together for Good. "Timely, more than you know," said one.

"This one was a real gem," said another. "Tears and laughter reading it."

Some have asked permission to make copies for friends and loved ones. Our response: Feel free to do so!

In fact, we're granting blanket permission to make and distribute copies of this particular article. To facilitate that, we've created a PDF file containing the May Cover article only. You'll find it here.

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Memorial Day 2020

Here is the U.S. law related to the observance of Memorial Day.

36 U.S. Code § 116. Memorial Day

(a) Designation — The last Monday in May is Memorial Day.

(b) Proclamation — The President is requested to issue each year a proclamation—

  (1) calling on the people of the United States to observe Memorial Day by praying, according to their individual religious faith, for permanent peace;
  (2) designating a period of time on Memorial Day during which the people may unite in prayer for a permanent peace;
  (3) calling on the people of the United States to unite in prayer at that time; and
  (4) calling on the media to join in observing Memorial Day and the period of prayer.

You can read this year's presidential proclamation here. In it, President Trump designates "the hour beginning in each locality at 11:00 a.m. [today] as a time when people might unite in prayer."

Further, all Americans are requested "to observe the National Moment of Remembrance beginning at 3:00 p.m. local time."


O beautiful for heroes proved
In liberating strife,
Who more than self their country loved
And mercy more than life!

America! America!
May God thy gold refine,
Till all success be nobleness,
And every gain divine!

– from "America the Beautiful' by Katharine Lee Bates

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SMI on the Radio: Staying Steady When the Market Is Turbulent (audio and transcript)

As the market's wild ride continues, SMI executive editor Mark Biller offered advice about staying as steady as possible in your investing approach on yesterday's MoneyWise Live from Moody Radio.

To listen to a portion of the program, click the play button below — or, if you prefer, scroll down for the transcript.

(And for more radio appearances by members of the SMI team, visit our Resources page.)

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Money Roundup: How to Create Money Out of Nothing, “Uncertainty” in Investing, and More

Here's our mid-May collection of interesting articles from around the web. We hope you find them to be interesting and educational. Stay safe!

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Brushing Up on Investing Lingo

At Sound Mind Investing, we have a commitment to clarity. As we say on our mission/vision page, "We tell you what you need to know, not everything there is to know." And we try to do so in simple language, avoiding (as much as possible) investing jargon that the average person may not know.

Still, some terms are almost unavoidable because they crop up somewhat regularly in news accounts and market commentary. So to further your "investment education," here are a few such words and phrases, along with simple explanations.

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Now Available: Personal Portfolio Tracker & Fund Performance Rankings With Data Through 4-30-20

SMI's Personal Portfolio Tracker and monthly Fund Performance Rankings are now updated with performance data through April 30, 2020.

• The Portfolio Tracker: The Tracker can personalize SMI's fund rankings to your specific situation, making it easier to apply our momentum-based Fund Upgrading strategy to your 401(k), 403(b), or other retirement plan.

Using the Tracker, you can filter the performance data of 25,000+ funds we follow and produce a concise report covering only the funds available in your plan(s). If you're new to the online Tracker, watch the introductory video.

We typically update the Personal Portfolio Tracker with the latest month-end data from the research firm Morningstar on the 8th of the new month, except when the 8th falls on a weekend. We wait until at least the 8th because Morningstar's database is subject to revisions during the first few days of the month. By the 8th, the previous month's performance numbers are reliable.

• Fund Performance Rankings (FPR): The FPR report is a 38-page downloadable PDF file containing the latest performance data — along with SMI's momentum rankings — for more than 1,600 no-load traditional funds and ETFs.

The funds included in the FPR are selected based on asset size, brand familiarity, and brokerage availability.

Check page 2 to learn how to use the FPR report. Page 3 includes an overview of the 70+ risk categories that will help you compare "apples to apples." Page 4 has explanations of the various data-column headings.

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The 69th Annual National Day of Prayer

Today is the National Day of Prayer in the U.S., a day observed annually since 1952 but with a history dating back to pre-Revolutionary War times.

In most years, Americans hold public prayer gatherings in towns and cities across the nation, but COVID-19 restrictions have suppressed most such meetings. Instead, many "virtual" events are occurring this year.

Also, the annual "National Observance," usually held on Capitol Hill, will take place this evening from venues across the country. It will be aired live (from 8-10 p.m. ET) via nationaldayofprayer.org, Facebook Live, God TV, and Moody Radio.

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