Since 2002, Blanchard has been telling our clients that the price of gold was going up – a lot. We believe that the current bull market will end only when gold surpasses it’s old high of $850. In today’s dollars, that would mean a price of more than $2000 per ounce! We’ve still got a long way to go.

During this same period, Blanchard has been recommending rare coins as part of our clients’ portfolios, since they are a better hedge than gold, a better investment, and offer more opportunities for windfall profits. We recommend rare coins even more strongly today, because of an historical relationship between gold and rare coins which takes much of the guesswork out of investing in rare coins.

Although rare coins are positively correlated with gold, price increases lag behind those of gold. When gold goes up, rare coins follow, and eventually go up much more than gold. Over the years, that lag has provided an early warning signal of impending bull markets and has produced periodic windfall profits for knowledgeable investors.

For example, some years ago, the Chairman and Chief Executive Officer of Fidelity Investments, the world’s largest mutual fund company, was one of the principal investors in a partnership that invested in rare U.S. coins. The partnership was liquidated approximately four years later at a profit of more than 500%. More recently, and on a much bigger scale, an affiliate of Kidder Peabody and Company was the General Partner of a fund which was organized to achieve capital appreciation through buying and selling rare U.S. coins. Rare coin prices went up more than 100% within the year. Some coins tripled in value - and more.

Independent reports and indices, including those published by sources as diverse as Solomon Brothers, Inc., The Wall Street Journal, Consumer’s Digest, GE Private Asset Management, Inc., and numerous auction houses, confirm the fact that portfolios of rare coins have had high rates of appreciation. The total value of all certified U.S. coins is less than $10 billion and only a very small number of the rare coins in existence are actually for sale at any given point in time. As a result, a relatively small amount of money can move the entire market substantially.

Rare coins not only follow gold, but surpass gold. Bull markets in rare coins always occur during or after periods of rising gold prices, but reliable, independent reports show that average annual returns on rare coins have historically been more than 300% greater than the returns on gold bullion. Read Full Blanchard Report Here

While the summer months are traditionally slow months for precious metals, Blanchard Chairman and CEO, Donald W. Doyle, Jr., says the current strength gold is exerting only underscores what his investment firm has been predicting since the beginning of the bull market in 2002 – that gold is tremendously undervalued, and he sees new record prices by year’s end – potentially $1,150 or higher.

“Inflation, a weak dollar, the rising price of oil, Middle Eastern geopolitical tensions, and the new influence of emerging markets around the globe are all factors supporting the up tick in the gold price,” Doyle says. “However, the key fundamental driver over the next six months will be renewed investment demand by institutions and individuals who are looking for a safe haven.”

Doyle says the equities markets have not hit bottom, and as investors see negative returns in stocks and steep declines in their 401K holdings, they are seeking out alternative investments where ever they can, particularly as the value of the dollar remains near record lows.

“It’s not that the financials are over-bought” Doyle says, “it’s that investors just aren’t buying. They’re looking for non-traditional financial vehicles, such as gold, to save the money they have. The good news for these investors is that gold has generated very nice positive returns of 43 percent over the last year and 11 percent year to date in 2008, and Blanchard sees this trend continuing long term as the economy continues to grapple with major issues that aren’t going away anytime soon unfortunately.” (more…)

To know which asset class will appreciate in value, you have only to follow the money. When the stock market is gobbling up all of the available discretionary funds, you know that alternative investments, such as rare coins, are going to do poorly. On the other hand, bear markets in stocks cause net withdrawals, which in turn support the prices of alternative assets as investors seek better returns.

There have been numerous articles in the financial press that have talked about the resemblances between 1987 and 2007. The topic is of interest to us because of the absolute explosion of the rare coin market that took place after the stock market crash of 1987. The crash precipitated a stampede to alternative assets like rare coins and, in a little over two years, the market in investment grade rare coins went up several hundred percent even as the price of gold fell from $500 to $360.

Financial conditions today lead us to believe that the rare coin market is poised to duplicate the bull market experienced 20 years ago. Today, we’re hearing much of the same language that we heard in 1987, when Alan Greenspan said that the world was on the edge of a global financial collapse. In fact, Greenspan said that the current market turmoil is “identical” in many ways to that which occurred in 1987.

The stock market crash in 1987 and the credit market crisis in 2007 both served to reverse the flow of funds into stock mutual funds. According to the Presidential Task Force on Market Mechanisms, appointed by President Ronald Reagan to investigate the October 1897 market crash, skittish fund shareholders withdrew billions of dollars from stock mutual funds and added to the market’s fall.

Read the Full Blanchard Article Here

Gold has had an extraordinary year in 2007, gaining more than 28 percent. Blanchard and Co. analysts predict new record highs and continued strong growth through 2008 as investors seek out quality assets that hedge risk and offer strong returns.

“The subprime mortgage crisis was the catalyst that pushed gold to 28-year highs, and now we’re seeing investors make a flight to quality as fundamentals are supporting strong prices and fueling growth,” said Donald Doyle, Ccairman and CEO of Blanchard and Co. “Gold and other tangible assets are thriving and the trend will continue as we move further into this commodity super cycle next year.”

If investors use the S&P 500’s 6 percent return to date in 2007 as a snapshot of the stock market, gold will become more appealing to more investors.

Doyle and his analysts are predicting that gold will reach $1,150 in 2008, extending its current six-year bull market that has returned an annualized 20 percent year-over-year return on investment since 2002. (more…)

Wednesday , 02 Jan 2008 NEW ORLEANS (January 2, 2008) - As gold broke through its previous record high of $850 Wednesday, set in 1980, Blanchard analysts say that while the macro-economic conditions between now and then may be similar, the fundamentals driving gold’s ascent are vastly different.

“When gold achieved its 1980 high of $850 per ounce, it maintained that level for only one day and was driven purely by speculation,” says Blanchard Chairman and CEO Donald Doyle. “Today, gold has maintained a consistent price point above $800 and is being driven by dollar weakness, rising oil prices and geopolitical tension, each of which seem to be locked in long-term trends.”

Doyle also says investor demand is at levels not seen in decades, which has also played an integral role in driving the price up more than 33 percent in 2007 alone. (more…)