1

Choosing a Gold FirmRight turns and wrong turns on the road to gold ownership 

by Michael J. KosaresThe ABCs of Gold Investing - How to Protect and Build Your Wealth With Gold

2BONUS ADVISORY

What you need to know before you buy your first ounce of  gold

Copyright 2015 by Michael J. Kosares. All rights reserved. No part of  this

publication may be reproduced, stored in a retrieval system, or transmitted

in  any  form  or  by  any  means,  electronic,  mechanical,  photocopied,

recorded, or otherwise, without the prior written permission of  the author.

1

How to choose the right gold firm

Some might consider the precautionary checklist offered below a matter of

common sense, but in our experience it is surprising how many prospective

gold owners simply dive-in without much in the way of  a consumer inquiry.

Your choice of  a gold firm can mean the difference between success and

failure as a gold owner.

Choose the right firm and it will help stay

the course on protecting your assets from

economic uncertainties. Choose the wrong

firm and you can be easily diverted from

true gold ownership through a maze of  re-

lated but speculative and/or derivative in-

vestments.

High-end numismatics, leveraged precious metals accounts, graded (slabbed)

contemporary bullion coins, off-brand bullion bars and jewelry items, gold

stocks, precious metals futures contracts or options, and exchange traded

funds (to name a few of  the wrong turns often taken by first-time investors)

– all have a gold component as part of  their profile, but are no substitute

for physical coins and bullion which you own outright.

Only gold coins and bullion meet the four basic criteria for safe-haven status

– liquidity, portability, tradeability, and "appreciability" in direct correlation

to the international spot gold price. Inherently there is nothing wrong with

owning any of  the other investment vehicles just listed as along as you are

mentally and financially prepared to shoulder the risks. If  you are interested

in owning the precious metals for asset preservation purposes, it follows

you would be best served by a firm specializing in coins and bullion for de-

livery.

The following are basic guidelines for choosing a gold firm. Apply the fol-

lowing tests to your choice of  a gold firm and we are confident you will get

off  to a strong start. We are confident too that USAGOLD will grade at or

near the top of  your list.

2

Experience

Choose a gold firm that has a solid track record. Ten years in business is

good; fifteen years or more is even better. As gold continues its secular bull

market, opportunists are sure to enter the market, resulting in numerous

start-up gold  firms  that often close  their doors as quickly as  they were

opened. Firms fifteen years old or more have seen both good times and bad

in the gold market. As such, they have demonstrated a commitment to the

industry  that  carries  a  great  deal  of   value  to  you  as  an  investor.  Such

longevity shows not only a commitment to the principles of  gold ownership

itself, but is also indicative of  the sustainability of  a particular organization

- an important indicator when it comes to the ethics of  an organization's

sales practices, the accuracy of  its advice, and it's ability to honor its com-

mitments.

USAGOLD

Gold coins & bullion since 1973

3

Information Services

Choose a firm with a commitment to keeping you informed – one that of-

fers information-based services suitable for our information-based age. Dur-

ing your time as a gold owner, much is likely to change in the economic and

political landscape. You will want to stay informed, and the mainstream press

does not always report prominently on the trends likely to affect your port-

folio or emphasize the articles of  interest to you as a gold owner. The better

gold firms usually offer services like newsletters and information-based web-

sites.  When interviewing a potential supplier, probe their knowledge and

understanding of  the economic processes at work in the gold market.  A

broker who is knowledgeable, professional and engaged in your interests

will be a far greater asset to you in the long run than one who performs es-

sentially a clerking function.

The USAGOLD.com website

Online since 1996

Our commitment to information services is almost as old as the

firm itself. Starting decades ago with our monthly hard-copy

newsletter, News & Views, and continuing today with our widely

acclaimed website, we have dedicated ourselves  to providing

first-class  information  services designed  to meet our clients'

needs. The USAGOLD website today hosts almost 1.5 million

visits per month – a guiding light and practical resource to its

users.

- Key web pages -

Daily Gold Market Report

Live Gold Prices - online & mobile

USAGOLD Blog - Today’s news & opinion

Charts & Stats

How-to pages  / Client services

And much more. . . .

We cordially invite you to visit.

www.usagold.com

4

Culture

Choose a firm willing to spend time with you and answer your questions.

The firm that is abrupt at the outset is likely to give you short shrift if  you

have a question or concern that needs to be addressed in the future. Be wary

of  companies that use aggressive sales tactics. Seek out and develop a rela-

tionship with firms that handle your inquiry in a friendly, professional man-

ner.

Also choose a firm with a large and satisfied client base. You will benefit

from the experience it has gained working with a variety of  situations. A

firm that knows its business can help you choose the right portfolio mix to

address your specific goals, circumstances and concerns. Understand the

difference  between  the  "client-oriented"  and  "customer-oriented"  gold

firms. The latter generally compete on the basis of  price with little or no at-

tention paid to your particular portfolio needs.

USAGOLD

A boutique firm with a large clientele

USAGOLD is unique among national gold firms in one

important respect. By design, we are a boutique firm with

a small but highly regarded staff  of  experienced and knowl-

edgeable client advisors. We have little interest in expensive

national media campaigns, a large and unwieldy overhead

and the aggressive sales tactics which usually accompany

that business model. Instead, we have gone about the busi-

ness of  building our clientele, which now numbers in the

thousands, through the USAGOLD website and by referral

from our existing clientele. 

Our commitment to the gold business spans nearly 40 years

and, during that time, we have built and maintained a rep-

utation for friendly, client-oriented service and consistent,

level-headed guidance – qualities that will benefit you as a

gold owner now and in the future.

Brokerage Services

USAGOLD carries the range of  precious metals

bullion coins and bars and bullion-related historic gold

coins that track the gold bullion price. Our unambiguous

purpose is to accomodate investors wishing to own pre-

cious metals for asset preservation purposes.

Our brokerage staff  is highly educated, competent and

fully attuned to the merits of  gold ownership.  In addition,

each staff  representative brings significant, practical mar-

ket experience to the table.

5

Business model

Choose a firm with a high degree of  professionalism and commitment to

the gold business. The level of  expertise in the gold market varies from firm

to firm as does their general interest in the economy and financial markets.

Although there are many outlets for gold, there are relatively few companies

with staffs capable of  providing reliable direction to the first-time investor.

Not every gold firm, for example, has asset preservation as its top priority.

Some tout leveraged accounts or high-end numismatics neither of  which

blend well with the safe-haven aspirations of  most gold owners. Then there

is always the firm that totally disregards the individualized needs of  the in-

quiring client and concentrates instead on its own agenda.

Before you even contact a gold firm, it would serve your best interest to as-

certain the real nature of  its business. You can learn much by browsing a

company's website -- something even the smallest firms offer these days. If

its product line, services (and, most importantly, its focus) seem a good

match, a follow-up call is in order. If  not, keep searching. The initial spade

work will end up saving you considerable time, effort and money over the

long run. 

6

Credentials

Choose a firm with strong credentials and a solid history. A firm that has

proven itself  to be trustworthy can help you avoid some of  the problems,

pitfalls and wrong turns often encountered on the road to gold ownership.

One reliable source for investigating a business' standing is a Better Business

Bureau (BBB) profile – something any reputable gold firm should have. (If

they are not members, that is a red flag in itself.) There you will find basic

information – the company's BBB rating along with a record of  complaints

and how they were handled. A history of  dissatisfaction, particularly if  there

has been a large number of  complaints, can be a warning sign even if  the

complaints were settled satisfactorily.

USAGOLD

An admirable track record for over forty years

USAGOLD enjoys an A+ rating with the Better Business

Bureau, and has been granted the right to display the Re-

liability Program logo. It has not had a single complaint

lodged against it for over over a decade, and has consis-

tently been awarded the annual Gold Star certificate which

goes to firms that have no complaints over the previous

three-year period. In addition, the firm is a member of  the

Industry Council for Tangible Assets since 1985. Michael

J. Kosares, the firm's owners is a life member of  the Amer-

ican Numismatic Association, having joined the organiza-

tion in 1975.

Competitive pricing on all items, all the time

USAGOLD prices all gold coins and bullion products

competitively all the time. You won’t be disappointed with

our pricing.  In fact, as proof  of  our standing, we are one

of  the few firms that publishes its gold bullion coin pric-

ing on the web – both daily closing prices and the prices

in real time as they change with the spot price.

7

Pricing

A well-positioned firm with strong industry connections can assure you that

the prices you pay are in line with market expectations.  When you compare

prices, make sure that you are comparing apples to apples.  Ask for quotes

as a percentage over the gold price.  With prices moving by the second, price

comparisons cannot be done effectively any other way.  

Referrals

If  you know of  a friend or family member who has a good experience with

a gold firm and feels comfortable referring it, that might be the best indica-

tor of  all and a valuable resource for you as a beginning gold investor. 

A highly recommended gold firm

Testimonials and notes of  appreciation are a regular

occurrence at USAGOLD.  Should you decide to choose

us as your gold firm,  you will experience first hand why

we are one of  the most highly referred gold firms in the

industry. 

8

Getting started

You cannot approach gold like you do other investments.  Timing is not the

primary issue.  The real question is whether or not you already own gold. If

you don’t, but you think you should, the best time to get started is now.

After all, what you really want to avoid is competing in an emergency situ-

ation with thousands of  other investors just as eager to own gold as you

might be under the circumstances.  Remember:  You can never be too early,

but you can ultimately be too late.  If  your goal is to protect your wealth in

a time of  economic uncertainty,  make sure you avoid the wrong turns that

can divert you from true gold ownership.

What USAGOLD  does not offer:

• Leveraged (margin) precious metals accounts

• High-end numismatics

• Graded (slabbed) contemporary bullion coins

• Off-brand gold bullion bars

• Gold stocks

• Precious metals futures and options

• Exchange-traded funds

What USAGOLD does offer:

• Gold coins and bullion for delivery

9

2What you need to know

before you buy your first ounce of gold?

Questions & Answers with Michael J. Kosares

Question. What kind of gold should I buy?

Answer. We probably get that question more than any other -- pretty much

on a daily basis. The answer, however, is not as straightforward as you might

think. What you buy depends upon your goals. We usually answer the "What

should I buy?" question with one of  our own: "Why are you interested in

buying gold?" If  your goal is simply to hedge financial uncertainty and/or

capitalize on price movement, then contemporary bullion coins will serve

your purposes. Those concerned with the possibility of  capital controls and

a gold seizure, or call-in, often include historic pre-1933 gold coins in their

planning. Both the contemporary bullion coins and historic gold coins carry

modest premiums over their gold melt value, track the gold price, and enjoy

strong liquidity internationally.

Q. When should I buy?

A. The short answer is  'When you need it.' Gold, first and foremost,  is

wealth insurance. You cannot approach it the way you approach stock or

real estate investments. Timing is not the real issue. The first question you

need to ask yourself  is whether or not you believe you need to own gold. If

you answer that question in the affirmative, there is no point in delaying

your actual purchase, or waiting for a more favorable price which may or

may not appear. Cost averaging can be a good strategy. The real goal is to

diversify so that your overall wealth is not compromised by economic dan-

gers and uncertainties like the kind generated by the 2008 financial crisis, or

those now unfolding in Europe and Japan.

Q. Why not wait for the necessity to arise, then buy gold?

A. Over the past few years, as concern about a financial and economic break-

down spread, there were periods of  gold coin bottlenecks and actual short-

ages. In 2008-2009 at the height of  the financial crisis, demand was so great

that the national mints could not keep up with it. The flow of  historic gold

coins from Europe was also insufficient to meet accelerating demand both

there and in the United States. Premiums shot-up on all gold coins and a

scramble developed for what was available. There is an old saying that the

best time to buy gold is when everything is quiet. I would underline that

sentiment.

Q. Can you give us a profile of the typical gold investor?

A. Gold owners are a group of  people I have come to know very well in my

40+ years in the business. Contrary to the less than flattering picture some-

times painted by the mainstream press, the people we have helped become

gold owners are among those we rely upon most in our daily lives -- our

physicians and dentists, nurses and teachers, plumbers, carpenters and build-

ing contractors, business owners, attorneys, engineers and university pro-

fessors (to name a few.) In other words, gold ownership is pretty much a

Main Street endeavor. A recent Gallup poll found that 34% of  American

investors rated gold the best investment "regardless of  gender, age, income

or party ID. . ." In that survey, gold was rated higher than stocks, bonds,

real estate and bank savings.

Q. What about high net worth investors?

A. Traditionally, wealthy, aristocratic European

and Asian families have kept a strong percent-

age of  their assets in gold as a protective factor.

The  long  term  economic  picture  for  the

United States has changed enormously over

the past several years. As a result, that same

philosophy  has  taken  hold  here  particularly

among  those  interested  in  preserving  their

wealth both for themselves and for their fam-

ilies from one generation to the next. In recent

years,  we  have  helped  a  good  many  family

trusts diversify with gold coins and bullion at

the advice of  their portfolio managers.

Q. You frequently mention gold as insurance. What do you mean by

that?

A. Gold's baseline, essential quality is its role as the only primary asset that

is not someone else's liability. That separates gold from the majority of  cap-

ital assets which in fact do rely on another's ability to pay, like bonds and

bank savings, or the performance of  the management, or some other de-

limiting factor, as is the case with stocks. The first chapter of  The ABCs of

Gold Investing ends with this: "No matter what happens in this country, with

the dollar, with the stock and bond markets, the gold owner will find a friend

in the yellow metal -- something to rely upon when the chips are down. In

gold, investors will find a vehicle to protect their wealth. Gold is bedrock."

Q. What percentage of my assets should I invest in gold?

A. Once again the answer is not cut and dry, but a general rule of  thumb is

10

“[G]old ownership is

pretty much a Main

Street endeavor. A

recent Gallup poll

found that 34% of

American investors

rated gold the best in-

vestment "regardless

of gender, age, income

or party ID. . ."

10% to 30%. How high you go between 10% and 30% depends upon how

concerned you are about the current economic, financial and political situ-

ation. Recently, CNBC television commentator Jim Cramer strongly advo-

cated a 20% gold diversification.

Q. In your book, you state: "Who you do business with is one of themost important aspects of gold investing." Why is that?

A. A solid, professional gold firm can go a long way in helping the investor

shortcut the learning curve. A good gold firm can help you avoid some the

problems and pitfalls encountered along the way, and provide some direc-

tion. It can help you in the beginning and through the course of  your gold

ownership both in making additions to your portfolio and liquidations.

Q. How can the average investor distinguish

between the good gold firms and the bad?

A. First, and most important: Check the Better

Business Bureau's profile on a company before

you do business with it. Check not only its rating

but the number of  complaints lodged against it

and how those complaints were handled. A con-

sistent record of  complaints can be a warning

sign even if  the company has managed to keep

an A+ rating. This is a simple and straightfor-

ward step every first-time investor should take,

but it is amazing how many ignore it. Second,

choose a gold firm that has a solid track record.

Ten years in business is good; fifteen years or

more is even better. Third, choose a firm with a

commitment to keeping you informed, i.e., one

that is interested in answering your questions

now and keeping you informed in the future. If

a sales person gives you short shrift or hits you with a heavy sales pitch take

it as a warning.

(Reader note: USAGOLD has been awarded the Better Business Bureau's

Gold Star Certificate, its highest accolade. In addition, the firm has been

rated A+ by the BBB with zero consumer complaints. The firm has been a

member since 1986 and accredited since 1991 when the BBB began its ac-

creditation service. To see USAGOLD's full BBB report, please visit this

link.)

Q. Can you briefly describe what you believe to be the biggest mistake

11

"A consistent record

of complaints can be a

warning sign even if

the company has man-

aged to keep an A+

rating at the Better

Business Bureau.

This is a simple and

straightforward step

every first-time in-

vestor should take, but

it is amazing how

many ignore it."

12

investors make when starting out as gold owners?

A. The biggest trap investors fall into is buying a gold investment that bears

little or no relationship to his or her objectives. Take safe-haven investors

for example. That group makes up 90% of  our clientele, and probably a

good 75% of  the current physical gold market. Most often the safe-haven

investor simply wants to add gold coins to his or her portfolio mix, but too

often this same investor ends up instead with a leveraged (financed) gold

position, or a handful of  exotic rare coins, or a position in an ETF that

amounts to little more than a bet on the gold price. These have little to do

with safe-haven investing, and most investors would be well served to avoid

them.

Q. What about the high profile gold companies that advertise on talkradio and cable television?

A. The same vetting rules outlined earlier apply. Check them out. Too often

investors make the mistake of  believing that the gold firm that sponsors

their favorite political commentator is also the best place to make their gold

purchases. National media campaigns are expensive and those costs are usu-

ally covered in the prices paid by investors for their gold coins. In some in-

stances that mark-up can be twice the gold value. Take care that you are not

paying too much for your gold and that you are buying the gold items best

suited to meeting your goals.

Q. What is your view of gold stocks?

A. Many of  our clients own gold stocks and we believe they have a place in

the portfolio. However, it should be emphasized that gold stocks are not a

substitute for real gold ownership, that is, in its physical form as coins and

bars. Instead, stocks should be viewed as an addition to the portfolio after

one has truly diversified with gold coins and bullion. Gold stocks can actually

act opposite the intent of  the investor, as some justifiably disgruntled mine

company shareholders learned in the recent past when their stocks failed to

perform as the price rose. There is no such ambiguity involved in actual

ownership of  gold coins and bullion. When gold rises, they rise with it.

Q. What about gold futures contracts?

A. Futures contracts are generally considered one of  the most speculative

arenas in the investment marketplace. The investor's exposure to the market

is leveraged and the moves both up and down are greatly exaggerated. Some-

thing like 9 out of  10 investors who enter the futures market come away

losers. For someone looking to hedge his or her portfolio against economic

and financial risk, this is a poor substitute for owning the metal itself.

13

Q. What about ETFs?

A. Since, for one reason or another, it is dif-

ficult to take delivery from any of  the ETFs,

they are generally viewed as a price bet and

not  actual  ownership  of   the metal. Most

gold investors want possession of  their gold

because they are buying as a hedge against

an economic, financial or pollical disaster.

When disaster  strikes,  it does not do you

much  good  to  have  your  gold  stored  in

some distant facility by a third party. For this

reason, over  the past couple of  years  the

trend even with hedge fund operators has

been away from the ETFs. In 2011, ETF

sales plummeted while purchases of  physical

coins and bullion for delivery skyrocketed.

Q. Please summarize. What is the best

approach for the safe-haven investor?

A. If  you want to protect yourself  against inflation, deflation, stock market

weakness and potential currency problems -- in other words, if  you want to

hedge financial uncertainties, there is only one portfolio item that will serve

you in all seasons and under most circumstances -- gold coins and bullion.

Make sure you do your homework on the company with which you choose

to do business, and make sure that the gold ownership vehicle you choose

truly reflects your goals and aspirations.

_____________________________________

Michael Kosares has nearly 40 years experience in the gold

business and is the founder of  USAGOLD. He is the author

of  The ABCs of Gold Investing: How to Protect and Build Your

Wealth With Gold as well as numerous magazine and internet

articles. He is frequently interviewed in the financial press. He is well-known

for his ongoing commentary on the gold market and its economic, political

and financial underpinnings

“If you want to protect

yourself against infla-

tion, deflation, stock

market weakness and

potential currency prob-

lems -- in other words, if

you want to hedge finan-

cial uncertainties, there

is only one portfolio item

that will serve you in all

seasons and under most

circumstances -- gold

coins and bullion.”

14

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This booklet  is distributed with  the understanding  that  the author and US-

AGOLD-Centennial Precious Metals, Inc. are not engaged in rendering legal,

accounting or other professional services.  If  legal advice or other expert assis-

tance is required, the services of  a competent professional person should be

sought. This booklet does not guarantee that pre-1933 gold coins would be ex-

empted from a confiscation should it occur, nor is it meant to offer a formal

legal opinion on the subject. 

15

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