HARRISBURG, Pa., Oct. 20 /PRNewswire/ -- As the U.S. economy wallows, more and more investors are looking to gold as a safe haven for assets, leading the Pennsylvania Securities Commission (PSC) to join other state regulators today in issuing a caution to the unwary about the need to investigate claims and assertions made about specific precious metals offerings.
"To reverse the old saying, 'all that is gold may not glitter,'" warned Robert Lam, chairman of the Pennsylvania Securities Commission. "Unless you're carrying the stuff around in your hand, you may not be purchasing what you think you are. It pays to be extra cautious because the current gold rush is attracting some unsavory elements to the feast."
Commissioner Steven Irwin advised, "Gold is not so much an investment as it is a commodity – and like any other commodity, its price can fluctuate dramatically. And even if you're comfortable investing in a commodity, you have to look carefully at sales commissions and redemption fees."
Historically, Irwin said, the value of gold-related investments fluctuate more than the stock market and gold typically moves in reverse of stocks and bonds.
Commissioner Tom Michlovic warns investors to consider fully what kind of gold investment is being offered. "In many cases, you may be thinking you are buying the actual gold; but often the investment is in gold-related market investments like mining stock or mutual funds are limited by law to have only a small portion of their assets tied up in a commodity like gold," Michlovic said. "It's this confusion of choices that has prompted the Pennsylvania Securities Commission to offer a special gold advisory on the PSC website."
Chairman Lam noted that the advisory, "GOLD. Are you an informed investor," is offered for download at www.psc.state.pa.us. "It's a quick tutorial in plain English that everyone should read before they consider gold as an investment option.
"If someone does not have access to a computer, they can call the Securities Commission at 1-800-600-0007 and we'll mail a copy of the gold advisory to them."
The new interest in gold has attracted some questionable players to the marketplace, Irwin said. "Other states are reporting cases where a seller claims that actual gold bullion will be held in a secure vault in the customer's name – but all the customer actually gets is a worthless piece of paper."
Michlovic urged caution to would-be gold investors. "Dot-com stocks looked unbeatable a decade ago. Mortgage companies were flying high just a couple of years ago," said Michlovic. "This gold thing is getting manic – and that's when people should be extra careful."
SOURCE Pennsylvania Securities Commission