Taki Tsaklanos' recent article, 5 Investment Tips To Riches, edited and abridged by Lorimer Wilson (munKNEE.com) provides excellent "food for thought" for investors.  I would like to focus on the author's fifth tip: "Only 20% of investors are profitable."

Stock "bugs" (as opposed to Gold bugs) typically and forcefully complain that currency used to buy gold and silver coins and bullion is a poor investment.  They like to quote Warren Buffet.  They maintain that gold and silver are passive--that they aren't actively involved in contributing to the economy(ignoring the obvious participation in the labor force by those involved in discovery, financing, mining, transporting, and marketing),and that they produce no interest income or dividends or splits.

Of course, brokers of equities don't emphasize the hazards of investing in their speculative or high-risk stocks, focusing instead on their awesome potential profits.  They have a whole range of equities for sale, from risky to ultra-conservative, yet, to them, gold and silver are too conservative to even be considered. 

Despite the fact that the market probably couldn't function without hedge funds, brokers disparage the purchase of precious metals as hedges--which is why they are so attractive to some "investors" and not nearly as attractive to "traders."

Before investors start counting profits from equity investing, there are a couple of "debits" that ought to be factored in.

One is inflation.  Percentages of inflation vary because those who compute inflation differ widely in methodologies and in choice of stats, but the most objective computation that I'm aware of puts inflation close to the CPI, at around 2 percent.  So, year after year equity investors need to subtract 2% before announcing profit.

But, inflation isn't the only "debit," because taxes and all the various fees also need to be subtracted before arriving at net profit.

In the meantime, while the value (purchasing power) of the investor's currency is being lessened by 2 percent each year--and that's been fairly steady over the past few years--the value of gold and silver appreciates by at least that much.  Notice I didn't say "the price of gold and silver."  It's shameful that the markets let so much confusion exist when it come to "value" and "price."  But surely, brokers wouldn't want to confuse or scare investors by emphasizing the "low prices" of precious metals contrasted with a rising Dow.

If you're making money in the equity market, that market holds you up as a shining example.  But, the PR is one thing.  Reality is another.  If you're profiting in your equity investments, your are one of only 2 out of 8 investors who are profiting.  Two investors are winning...winning the shirts of six others.

Stock "bugs" would like for every investor to think of him/her self as a market winner, but market reality is far different.  I'm just an old farm boy from Arkansas, but 2 out of 8 just don't look like good odds to me.  Ain't no way you could convince me to plunk down six bits on a horse to "Win," if those who know him best expect him come in last or next to last in a field of eight. That's where "smart money" collapses into a desperate "hopin' for the best."

The way I look at it, the Fed wants inflation. And what the Fed wants, it usually gets, so inflation can be counted on--and maybe more than we count on.  Broker and brokerage fees aren't going to go away, and they're likelier to increase than decrease.  Ditto for taxes.

So, folks, over the long haul, it 'pears to me that those who buy and hold gold and silver stand much better chances of profiting compared to those who plow their currency into a top-heavy equities market that's teetering on poor fundamentals, corporate debt, and poor prospects for corporate profitability in an American economy that's oppressed by consumer debt.