Beware of Brexit headlines pushing you to buy gold – by Bernard Condon (Globe and Mail – July 12, 2016)

NEW YORK — The Associated Press – If you thought the Brexit vote was scary, check out the full page newspaper ad that recently appeared in The New York Times recounting all the horrors in the present tense, as if they were still unfolding: The vote “topples” the British government, “crushes” the pound and “wipes away” billions in stock market wealth.

Then came the purpose behind all the panicky prose. “Buy Gold Now!”

Investors have done just that, pushing up the price of the metal to a two-year high. But before joining the rush, experts warn, beware that assets marketed as conservative and safe bought in a panic can sometimes wallop investors with losses they were trying to avoid.

The ad was from a company selling gold coins that is run by is Philip Diehl, a coin expert with an impressive pedigree. He was the staff director of the Senate Finance committee, chief of staff at the Treasury Department, then head of the U.S. Mint, the government agency that stamps out dimes, quarters and other coins.

The company he heads, U.S. Money Reserve, may sound like U.S. Mint, but it is an unrelated, private company, as readers can see in the fine print at the bottom of the ad. “Phones have been ringing off the hook,” said Mr. Diehl of the reaction to Brexit. Gold is “a way of protecting wealth. It’s like auto insurance or house insurance.”

Barbara Roper, a director of investor protection for the Consumer Federation of America, has no opinion on gold itself, but urges caution. She notes that investments sold as “safe” to investors are often anything but.

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