Below is a summary of my 15-page special report, “Classic Gold Scams and How to Avoid Getting Ripped Off.” If you’d like to learn more and receive a free download of the full report, go to www.goldscams.com.

I’ve always advocated that investors hold at least 5-10% of their portfolios in physical precious metals. With major Western nations now defaulting on their debts, more and more investors have decided it’s time to take my advice and own an asset that doesn’t depend on the solvency of an ETF, bank, or government.

Unfortunately, with all these news buyers in the gold market, there is ample opportunity for dishonest firms with big advertising budgets and celebrity endorsements to make a quick buck.

If you are thinking of buying gold or silver for investment, diversification, or asset protection reasons, this quick guide will help you avoid common scams and pitfalls.

The Numismatic Bait and Switch

Thus far in 2011 the overall stock market movement has been much different from what we had in 2010. This year we have seen nothing but sideways to lower prices with wild price swings on a day to day basis. There just has not been any really solid trends to take advantage of this year. Instead we had to actively trade the oversold dips and sell into the overbought rallies to just pull money out of the market on a monthly basis. Last year we saw 3 major rallies that lasted several months making it easy for anyone who bought into the trend to make money if managed properly.

Looking forward to 2012 it looks as though we are going to see some major changes unfold globally that will change the way we do things live our lives. Unfortunately its a very negative outlook but I do have hope that something will be done to perserve are somewhat normal lifestyles. I’m not one to talk doom and gloom, there are enough of those guys out there already so lets stick with the charts and focus on what is unfolding now in the present and how to take advantage of it…

The charts below show what I feel is likely to happen going into the new year IF we don’t get any major headline news in Europe that triggers another selloff.

“Even among those who do plan, there are speed bumps along the way. In my three decades on Wall Street, I have seen many of the same mistakes time and time again.  Here, I have assembled my list of Top Ten Biggest Investment Mistakes.

10. “Hot Potato” buying—Buying the popular stocks of the day or the latest get-rich-quick scheme. Unless you have a crooked rabbit, the turtle always wins this race in investing.
 
9. Believing publications—You see it all the time. Some magazine headline that reads “Ten sure-fire ways to riches,” or “Ten stocks to beat the market,” etc., all for the low, low price of a few bucks for that issue. While there are some really useful publications, magazines like Money who depend mostly on financial institutions for advertisement are, in my opinion, always tilted to the cup being half full and are not truly objective.

By Richard Russell the 87 year old,  veteran B-25 Bomber navigator in WWII, and the Man known as  the Granddaddy of Newsletter writers for his persistent daily study of the markets and his writing about them for over 60 years. Here is his brief, to the point and very important comment:

My advice. We are moving closer and closer to what I call “survival period” — the period where the magic of compounding turns into what will be the poison of compounding. This isn’t a time for timing. This is a time for action. Reduce your exposure to bonds and all items that provide fixed interest rates. Similarly, reduce your exposure to stocks except the gold miners. Look to expand your positions in inflation-protected assets, especially gold.

Those who are holding stocks in the hopes of the usual rebound are going to be terribly disappointed in the years ahead. This bear market is going to be unlike anything we’ve ever seen before. In the end my survival vehicle will be gold. I say again, timing is hopeless. Gold will have purchasing power and true wealth as almost everything else is destroyed by this unprecedented bear market. The US Government is now so loaded with ever-growing debt that it has become a mathematical freak. We return to different times, when rising interest rates will eat up the US government. With $55 trillion in assorted debts, the US is in no shape to deal with rising interest rates. We are in a state of reverse compounding, leading to inevitable bankruptcy on a massive scale.

As He Sees More Global Economic Woes, A Robust Chinese Currency, And An Ugly Chinese Property Bubble Burst

The veteran investor sees more trouble ahead for the world economy, and claims he is mainly holding short positions in stock markets.
Beijing, China (November 25, 2011) — Jim Rogers, Chairman of Rogers Holdings and a famed investor, says he sees more trouble ahead for the world economy in the next few years, and is shorting shares in various markets.

“I mainly short shares around the world,” says Rogers. “I have shorted American technology companies, I have shorted European stocks and shorted emerging market stocks.”