Gold Scam 3: Skewed Salomon Index
The Coin Con: If you want to buy gold as a hedge against inflation or to garner a decent return, that’s admirable. But beware of the Salomon Brothers Index quoted by dishonest dealers as proof that you will get rich quick. This annual index, formerly compiled by the New York investment bank Salomon Brothers, can show appreciation of 12% to 25% a year by a trick of math — but the reality is that the Salomon index was based on a list of 20 very rare coins. Gold eagles you get at the local coin shop are far more common and less likely to appreciate at the same rate.
Solution: Be realistic with your expectations and don’t get pressured into buying due to some get-rich-quick scheme. As the saying goes, “If it sounds too good to be true, it probably is.”