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Secretary of State Ross Miller Urges Caution for Investors Mining for Golden Opportunities
Posted Date: 10/19/2010
FOR IMMEDIATE RELEASE
Contact: Pam duPré
(775) 684-5748
pdupre@sos.nv.gov

(October 19, 2010, Carson City) – With gold prices reaching record highs, investors are increasingly turning to gold-related investments. Secretary of State Ross Miller and the North American Securities Administrators Association (NASAA) are reminding investors to be cautious about jumping onto the gold bandwagon.

“The soaring price of gold has sparked a 21st Century gold rush among investors eager to recover stock market losses. But it’s still the Wild West out there and dangers abound for Nevadans looking to invest in gold,” said Secretary Miller.

Miller’s Securities Division and NASAA have issued an Informed Investor Alert to help investors spot the risks of gold investments.

“It is a myth to say that gold is a safe investment. An investment in gold is not foolproof,” Securities Administrator Carolyn Ellsworth said. “Investors need to know their investment objectives. Gold may not provide long-term investment returns. Gold is a commodity, and, like other commodities, its price can fluctuate dramatically.”

Historically speaking, the value of gold-related investments fluctuates even more than the stock market. Gold often moves in reverse of stocks and bonds, so when stocks are down, gold may seem like a very tempting investment.

There are many ways to invest in gold, including buying actual gold or making gold-related market investments in mutual funds, exchange-traded funds and futures, as well as shares of gold mining companies. The investor alert examines each of these options and explains what investors need to know about each before deciding to invest.

Secretary of State Miller also advises investors to beware of gold investment scams. For example, in one typical scheme, a seller offers to sell actual gold bullion and then retain the investor’s gold in a “secure” vault with a promise to sell the gold for the investor as it gains in value. In many instances, the gold does not exist. In another typical scenario, a company encourages investors to cash out of their poor-performing investments to purchase gold, which may be nothing more than “fool’s gold.”

“Remember, if you are advised to cash out investments and roll funds into a different type of investment, make sure the person advising this is licensed by your state securities regulator,” Miller said. Nevadans can check out their investment professionals on-line at www.nvsos.gov.

The alert is available on the Investor Education page under the Securities Center at www.nvsos.gov. For more information, contact the Securities Division at 702-486-2440.
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