Bear with me for just one short academic moment.

In the world of finance, correlation is a statistical measure of how two securities move in relation to each other. Correlation is computed into what is known as the correlation coefficient, which ranges between -1 and +1. Perfect positive correlation (a correlation co-efficient of +1) implies that as one security moves, either up or down, the other security will move in lockstep, in the same direction. Alternatively, perfect negative correlation means that if one security moves in either direction the security that is perfectly negatively correlated will move by an equal amount in the opposite direction. If the correlation is 0, the movements of the securities are said to have no correlation; they are uncorrelated.

In real life, perfectly correlated or uncorrelated assets are rare; rather you will find securities with some degree of correlation. For investors trying to build diversified portfolios that improve returns while reducing risk, correlation is not a good thing. In fact, it is a very bad thing. High correlation amongst investments means that as one goes up (or more recently) down, all the others move right along with it.

Unfortunately, the interconnectedness of global markets has led to a very high level of correlation between assets, not only among equities, but across most asset classes that, on the surface, don’t seem like they should be all that correlated. According to The Economist, March 9, 2007, “Perhaps it should not be too surprising that, according to Merrill Lynch, over the past five years the Russell 2000 index of small American companies has a 94% correlation with the S&P 500, the main Wall Street index. More alarmingly, international stock markets have not offered any diversification either: they have shown a 95% correlation. Yet more startling are the figures showing that hedge funds have recorded a 94% link with shares. Even property has been following Wall Street 81% of the time.”

Why should investors be concerned about this? For a very large segment of the population, our jobs/incomes (and any defined benefit pensions) are tied to the state of our employers/companies, which are tied to the state of the economy, which is tied to the state of the financial markets. Defined contribution pensions, 401k’s, and IRA’s are most commonly invested in equities (through mutual funds or self-directed accounts) and are therefore tied to the same set of risk variables in the economy (interest rates, energy prices, geopolitical instability, natural disasters, currency fluctuations, commodity prices, illiquidity of credit markets, etc.) When the entire house of financial cards starts tumbling, only uncorrelated assets have the ability to be a lifeline to investors’ net worth.

Enter life settlements as investments. Life settlements are discounted cash settlements paid by investors to life insurance policyholders. In exchange, investors later receive the full amount of the life insurance policy upon the passing of the insured; a win-win transaction. Policyholders, who choose to sell their policy, receive cash now to enhance the quality of their remaining days. Investors receive an excellent return on investment, historically a double-digit return.

How does that solve the correlation dilemma facing investors today? The July 30, 2007 cover story of Business Week, Profiting From Mortality, states “Moreover, [life settlements are] ‘uncorrelated assets,’ meaning their performance isn’t tied to what’s happening in other markets. After all, death rates don’t rise or fall based on what’s happening to commodities, say. Uncorrelated assets like these are highly prized in an increasingly connected global financial system.” Life settlements bring a true measure of diversification to investment portfolios at a time when most other investment asset categories are increasingly operating in parallel.

“Investors are attracted to life settlements because insurance is seen as a noncorrelated alternative asset. Life settlements provide noncorrelated diversification because insurance policies are independent of the factors contributing to economic downturns, such as interest rate fluctuations and increasing fuel cost. As a result, life settlements are one way to reduce a portfolio’s exposure to sudden downturns in the stock and bond markets,” according to Conning Research & Consulting, Inc.’s 2007 study “Life Settlement Market: Increasing Capital and Investor Demand”.

Wall street firms have known this for years. Firms like Berkshire Hathaway and AIG have poured hundreds of millions of dollars into life settlement portfolios, to mitigate risk in all their other “correlated” assets. Institutional investors are using life settlements to shore up collateral for development projects. After all, unlike real estate, life insurance policies (logically) don’t decline in value over time. Each day, a life insurance policy is one day closer to reaching full value.

Options for individual investors to participate in life settlement assets had been few, but the investment picture is improving. Funds are on the horizon, although not yet here, and fractional ownership arrangements already exist, that provide the diversification necessary to achieve a predictable rate of return for an individual life settlement investment portfolio.

Financial advisors have preached diversification for years. What they were really trying to say and most of them didn’t realize it, was that investors need to uncorrelate their investments. Unfortunately for many of us, diversifying with a bunch of highly correlated assets achieved nothing, didn’t diversify, only “deworsified”. Life settlements, on the other hand, are one truly uncorrelated investment asset.

Dave Yelken is a life settlement expert and the owner of Accelerating Wealth, LLC, a financial services agency specializing in life settlement strategies, based in Bedford, Texas. To contact Dave, or to add yourself to his mailing list, please visit http://acceleratingwealth.com/

1. Whether you are buying from a bricks and mortar dealer or buying online through a website or and auction site like EBay, check the reliability of the dealer first. For a store, at least check with the local Better Business Bureau. If the dealer is a member of the Professional Numismatists Guild (PNG), that is a big plus. For an EBay auction, check the seller’s feedback rating. If it’s very low, or there are many negatives, think twice (and a third time) before spending a large sum with them. Even if the feedback seems good, look closer, some people will buy or sell a number of very inexpensive items to build up their ratings, then jump in selling big ticket items. On large ticket items, ask if the seller will agree to use Escrow.com. They act as a middleman in the transaction and the money doesn’t pass to the seller until the buyer is satisfied with the item. There is a charge, which the buyer would be expected to pay, but its well worth it when big money is changing hands.

2. One of the biggest problems buying collectible gold coins is grading. Your idea of an MS65 may be different than the dealer’s. Many coins have a huge gap in value between grades. Avoid the issue by buying only coins that have been graded by one of the third party grading services. Make sure that you only accept the major services (ANACS, NCG, PCGS, NCS, ICG) grading, there are some lesser known grading services whose grading may be suspect. You should also want the grading to have been done in the recent past. Grading standards have changed over time and what was an MS65 five or ten years ago, might only be an MS63 or 64 today.

3. Make sure the seller has a return policy that will allow you a refund if you are not satisfied with the coin. This should apply to both on-line and off-line dealers. This is especially important if you are buying a non-certified coin. You want to have the option to return it if your grading service returns a lower grade than you bought it at.

4. Buy the scarcest coin in the best condition that you can afford. Many collectible gold coins sell near the melt price of gold because there are more than enough around to cover demand. This is especially true in the lower grades. When gold increases or decreases in value, these coins will follow by a like percentage. But the higher the grade, the lower the population and demand will push up the price rather than just following the price of gold.

5. Try to invest regularly. As with the stock market, it’s very difficult to call the tops and bottoms of the coin market. Over the course of time, you will fare better by dollar cost averaging than investing a large amount at one time.

Ken is a successful writer and online entrepreneur. He has developed Gold Coin Investing as a portal for presenting articles, information, resources, news and links about buying and investing in gold coins.

The problem that I have with information that comes from the US is the high amount of “sales” and “marketing” in the content. Now I know that it is very hard to be objective, but in the financial world, it is sometimes nice-to-have a solid and objective opinion from a guru. More in a situation where it is hard to find rational and objective data that will tell what the status really is.

Someone I would normally trust is a guru like Warren Buffet. The man has become rich and famous becuase of his investment approach. He is one of the richest men. As he is still leading a large investment fund, he should probably know.

“The worst of the crisis in Wall Street is over,'’ Buffett said today on Bloomberg Television (1).

Now this really worries me.

I’ll try to explain.

When I listen to information from the US I tend to subtract a percentage of what I would call “marketing noise” or “sales bias” from the message. I know the US culture is sales oriented most visible in “the American dream” where everything is possible. But as a European I’m often more skeptic about things.

Perhaps the best example of such a sales biased message was pronounced by The president of the US to start the War on Iraq. More simpler examples are available too. But on average I would call the sales bias an inclination towards an over-optimism in the best of senses and without judging this phenomenon.

But from the other side of the Ocean, my skepticism remains. Especially on this topic: the stock market. not because of my interest in it, but much more, because I think to know more about this market than about the situation in IRAQ and the Middle-East. To put it differently. If someone would had asked me back than in 2003: do you believe that IRAQ had mass destructive weapons? I would probably had answered, most likely not, but I’m not sure.

If someone now asks me: is the financial crisis over, I would probably say (write): it probably is not. The worst is yet to come.

The financial world is too complex to analyze so we often support our action on gurus and advisers and their opinions.

In this case, on the financial market, i do not quite trust the opinion of Warren Buffet. I fear that he is just saying this not to further upset the market. In a sense, there is nothing wrong with that. If people and leaders start to express negative opinions on the financial market it would become a self-fulfilling prophecy. “A bear-market is only just around the corner.”

That doesn’t mean that the other way is more promising: if one of the most famous investors claims that “the worst is behind us,” I think we have to prepare ourselves for some more problems.

The core of the problem is credibility. The credit crisis has been provoked because of the same “sales culture,” where people are sold loans “because it would be a problem.” Now the same banks and investors try to comfort us “that the worst is over.”

Yeah, I believe you.

Hans Bool

(1) - http://www.bloomberg.com/apps/news?pid=20601087&refer=worldwide&sid=aeLirKvQi5jw

Hans Bool writes articles about management, culture and change. If you are interested to read or experience more about these topics have a look at: Astor White.

The stock market is a great place to make money, and if you intend on doing this with stocks and mutual funds, it is highly recommended that you first carry out some research on the companies you wish to invest in. The stock market can be a great way to make money, sometimes very quickly but these sorts of gains are generally made by people that know what they are doing and short term risks can be involved. If you are after long term security with huge financial gains then you will most likely look at real estate as a way to ear money. Many people buy homes that need upgrading and this is a way to buy them at a knock down price but it should be remembered that to sell on a house for a profit requires a little more than just a coat of paint.

There are however, many factors that should be considered before any attempt is made to invest in real estate; this is not the case with the next option. Probably the fastest growing way is through trading online and it’s amazing how easily you can work your finances online, and make money without even leaving the house. Anyone trading online can first check the companies they are interested in, their growth and performance for example before they decide to invest with them, all of which can be done quickly and easily. While many people make a decent profit doing this you must be disciplined in your approach as it is easy to let it start ruling your life and wallet.

Whichever market you plan to work in, remember investing is a skill; true it can be learned but that often requires patience which is something many short term investors do not have. If you are truly serious about making money from trading then simply must do the basics, study and research the field you are in. For further information on the subject with some interesting case histories, simply visit the forums, blogs and websites that are a powerhouse of good advice. I know many people that thoroughly enjoy investing this way and having control over an investment portfolio; I also know a few who approached it the wrong way and lost large sums of money in the process so be one of the wise ones.

Francisco Segura owns and operates http://www.burgerkingfranchiseguide.com/burger-king-locations.html - Burger King Locations

Discounted Cash Flow Analysis:

Free cash flow (FCF) is calculated easily by finding the difference between Operating Income (OI) and the change in Net Operating Assets (^NOA or NOA1 - NOA2) or FCF = OI - ^NOA

The FCF forecast model uses FCF now and estimates into the future discounted by the Required Return on Capital (RC). The RC is calculated using the stock’s Beta, the risk free rate of return (usually 3 mo. t-bill), and a market risk premium (expected return on the market - risk free rate). This calculation is made however many years out the forecast is intended to extend to, maybe 3-5 years. So it looks like:

Value = FCF/RC + FCF2/RC2 + ….. + FCFn/RCn + CV

The last part of the formula, CV, is the continuing value, is an estimate of value for a finite forecast horizon of FCF’s. It is calculated as follows: FCFn+1/(RC-1) or if you forecast FCF to grow at a constant rate then FCFn+1/(RC-g), where g is 1 plus the forecasted rate of growth in FCF.

The problem with using discounted FCF is that it does not measure value added. FCF is a measure of stocks and flows. The analysis charges this flow of money with the required return on capital. Assume a company makes a large investment and as a result ends a quarter with negative cash flow. Value is not derived from this figure and cannot be accurately forecasted, but in the long run there is potential value added from the cash investment. FCF does not measure this.

The Residual Earnings Forecast Model:

First, let’s define residual earnings (RE); RE = Return on Common Equity (ROCE) - RC * Common Shareholders Equity (CSE)

So what does this measure exactly? This measures the return to shareholders above the required return on capital. The discounting process is the same as with FCF, where a CV is used at the end, but RE is used instead of FCF; V = CSE + RE/RC + RE1/RC1 + … + REn/RCn + CV.

One important note must be accounted for; this model can only be used when there is no debt recorded on the books. Otherwise debt acts to lever up ROCE, distorting real value added.

So here we have a cleaner forecast, one that determines whether value is being added in earnings. You can tell by the difference in ROCE and RC. If it is positive, RE will be positive and value is added. The opposite is true if ROCE is less than RC.

Again, debt distorts this forecast, in which a different formula will be needed, but I will not cover in this particular article. Also, beware of long forecasts, the longer the time horizon the more speculative in nature it becomes. For this reason, I do not forecast out beyond the current year and scrap the CV.

If you have any comments or suggestions, especially with regards to the use of risk free rates and expected returns on the market, please comment here.

My name is Matthew Scullen, I am a financial administrator for an independent investment representative.

I currently keep a daily blog, http://capitalhd.blogspot.com/ titled Capitalism…Now In HD, an analysis of economics, the Fed, Investing and markets.

I have a degree in economics and I am an amateur investor, preparing to be licensed as an Registered Investment Adviser. I am drafting business plans for my own investment management firm.

Discounted Cash Flow Analysis:

Free cash flow (FCF) is calculated easily by finding the difference between Operating Income (OI) and the change in Net Operating Assets (^NOA or NOA1 - NOA2) or FCF = OI - ^NOA

The FCF forecast model uses FCF now and estimates into the future discounted by the Required Return on Capital (RC). The RC is calculated using the stock’s Beta, the risk free rate of return (usually 3 mo. t-bill), and a market risk premium (expected return on the market - risk free rate). This calculation is made however many years out the forecast is intended to extend to, maybe 3-5 years. So it looks like:

Value = FCF/RC + FCF2/RC2 + ….. + FCFn/RCn + CV

The last part of the formula, CV, is the continuing value, is an estimate of value for a finite forecast horizon of FCF’s. It is calculated as follows: FCFn+1/(RC-1) or if you forecast FCF to grow at a constant rate then FCFn+1/(RC-g), where g is 1 plus the forecasted rate of growth in FCF.

The problem with using discounted FCF is that it does not measure value added. FCF is a measure of stocks and flows. The analysis charges this flow of money with the required return on capital. Assume a company makes a large investment and as a result ends a quarter with negative cash flow. Value is not derived from this figure and cannot be accurately forecasted, but in the long run there is potential value added from the cash investment. FCF does not measure this.

The Residual Earnings Forecast Model:

First, let’s define residual earnings (RE); RE = Return on Common Equity (ROCE) - RC * Common Shareholders Equity (CSE)

So what does this measure exactly? This measures the return to shareholders above the required return on capital. The discounting process is the same as with FCF, where a CV is used at the end, but RE is used instead of FCF; V = CSE + RE/RC + RE1/RC1 + … + REn/RCn + CV.

One important note must be accounted for; this model can only be used when there is no debt recorded on the books. Otherwise debt acts to lever up ROCE, distorting real value added.

So here we have a cleaner forecast, one that determines whether value is being added in earnings. You can tell by the difference in ROCE and RC. If it is positive, RE will be positive and value is added. The opposite is true if ROCE is less than RC.

Again, debt distorts this forecast, in which a different formula will be needed, but I will not cover in this particular article. Also, beware of long forecasts, the longer the time horizon the more speculative in nature it becomes. For this reason, I do not forecast out beyond the current year and scrap the CV.

If you have any comments or suggestions, especially with regards to the use of risk free rates and expected returns on the market, please comment here.

My name is Matthew Scullen, I am a financial administrator for an independent investment representative.

I currently keep a daily blog, http://capitalhd.blogspot.com/ titled Capitalism…Now In HD, an analysis of economics, the Fed, Investing and markets.

I have a degree in economics and I am an amateur investor, preparing to be licensed as an Registered Investment Adviser. I am drafting business plans for my own investment management firm.

The favorable conditions that helped drive the recent private equity boom have changed dramatically over the past year. Future private equity returns will be much lower than they were over the past 5 years and could prove to be quite disappointing for many investors. I believe the private equity peak was 2006 and the first half of 2007. The Private Equity boom was driven by very cheap debt, a bull market in equities, a strong global economy, rising corporate profits, massive capital inflows into private equity, Sarbanes/Oxley reporting rules for public companies, and strong initial returns. Some of the large private equity companies are Blackstone, Carlyle Group, Kohlberg Kravis Roberts, Texas Pacific, Thomas H. Lee, Cerberus and Bain Capital.

Private equity historical returns:

Past returns in the large private equity funds have been very good, beating equity market returns. According to Fortune Magazine over the 10 years to mid-2006 (the likely peak for PE) returns on private equity averaged 11.4% vs. 6.6% for the SP500 stock market index. Longer-term (20-year) results show that private equity investments have returned about a 4%-5% premium to the public equity markets. Of course these superior returns are achieved with significantly higher risk and an investment that is “locked up” for many years.

My Concerns About Private Equity Investing and Future Returns:

1. Debt has become much more expensive for leveraged buyouts. Cheap and plentiful debt was one of the key factors that allowed private equity firms to succeed. Private equity is often just a leverage buyout (LBO’s) of companies. Over the past 5 years high yield or “junk” debt was very cheap and traded at a very small premium to treasury debt. Over the past 6 months junk bond debt cost premiums have jumped significantly (from 3% to 8%), and the availability of high yield debt has decreased dramatically due to the credit crisis. Future PE returns will be hurt because of this higher cost debt, and because they will not be able to use as much leverage. Less leverage means lower returns for investors.

2. The economy is much weaker now. We may be in a recession right now. Recessions are normally very bad for leveraged companies. Given how much debt these companies layer on to their investments these private equity investments carry a fairly high level of risk. Private equity firm Cerberus is struggling with its leveraged ownership of Chrysler and GMAC (housing and auto loans, 1Q08 loss of $589M) in the current economic downturn.

3. There has been massive growth in the number of private equity firms and the dollars of capital invested in private equity, all chasing the same deals, and paying higher prices. Above average returns nearly always get competed away as tons of new supply or capital enters the market. Acquisitions are now much more competitive and expensive. Private equity companies can’t buy companies “cheap” any more with all the competitors bidding for the same assets. Many of the large hedge funds have also gotten into the private equity business over the past several years, making it an even more crowded space. More players chasing deals at lower returns just to “put money to work”?

4. Several big private equity firms have recently gone public. Why would they do that? That is inconsistent and hypocritical with their whole philosophy of how much better it is to run companies privately. Did they sense a “top” in the market for private equity? I think so. The industry insider “smart money” was selling, so why should we be buying? The PE companies that did go public have seen their stocks drop significantly recently on concerns about the private equity industry. Blackstone (BX) is one of the biggest players in the private equity business. Their stock has fallen by over 40% since they went public (at the peak) and their fourth quarter earnings (announced March 10th) were down by 89%.

5. Some of the private equity firms are recently having trouble getting big deals done. Some big buyout deals have fallen apart due to the less attractive terms with the new environment, a slower economy, or the inability to get financing. Less big deals getting done and at less attractive terms means lower future returns for private equity investors.

6. The Private Equity firms are going after smaller and less lucrative deals out of necessity. The firms are now doing small investments, making private investments in public companies (PIPE’s), backing small growth companies, and buying convertible debt. These types of deals are likely to result in lower returns that the traditional big LBO deals of the past. Blackstone chief James says “we are looking at deals that don’t depend on leverage”. Harvard business professor Joshua Lerner says the term LBO is a bit obsolete when neither leverage nor a buyout is at hand. Many of the big PE firms are not able to find good investments so they currently are sitting on lots of cash, which doesn’t produce much of a return at all.

7. Fees are very high for investors. The private equity fees are typically 2% per year, plus 20% of any profits earned. That is very expensive, especially if they are investing in cash, converts, PIPE’s, smaller less leveraged deals and expected returns are significantly lower than they were in the past.

8. Access to the best funds and private equity companies is restricted. If you are a smaller investor with only a few million to invest in private equity, you are unlikely to get access to the biggest or best private equity companies and funds. Past performance of a particular PE manager may not be a very great indicator of future performance. You may have to settle for a less seasoned private equity fund or a “fund of funds” with an extra layer of fees.

I think there will still be a place for private equity investing among large institutional investors, but that returns could be somewhat disappointing over the next 2-3 years for everyone. In my opinion most individual investors should avoid this investment sector for now.

Keith Tufte
President
Longview Wealth Management, LLC.
http://www.longviewwealth.com

Investment programs are usually put together by companies that have an interest in varied investment vehicles but can also devote their time and effort to a particular type of investment. Some programs also involve government participation and guarantee.

When looking for investment ideas, look to the historical performance of the managers and evaluate the previous results of their efforts. Such programs will often encourage investors to join management in applying their capitol to partly funded enterprises that require further asset development or project redevelopment. Investments are all detailed in the accompanying prospectus’s and can offer very good returns under capitol guarantee.

Some opportunities may involve local participation in community developments and are for the purpose of community development projects. These can be run by investor groups or local government. Developers of property often raise funds through structures that invite several investors to participate. These types of investment structures are often closed to general investors although expressions of interest may be sort by the average investor.

When researching this type of investment always look at the legal requirements behind the investment offer. Most investment offers that give shares or part rights in the investment have to past the scrutiny of the Australian Security and Investment Commission. These investments will also require legal documentation to be signed. Have the appropriate legal sources evaluate the documents and check for any fine print.

Search the various financial media for these investment types and visit web pages that offer information on investing. It is important to do your homework before entering into this type of investment.

For further information on a type of investment program visit http://www.investmentprogram.freedvd.com.au

James McInnes is a professional share market trader and investment entrepreneur, with many years experience trading the Australian Share market. You can visit his site at http://www.investmentprogram.freedvd.com.au for further information on trading the Australian Share Market

Listed below are a few savings and investment options and a brief description:

Passbook Accounts - Most of us are introduced to the world of finance with a passbook savings account from our local bank. Advantages: No risk; federally insured; convenient. Disadvantages: Low interest rates; possible fees for low balances.

Bank Money-Market Accounts - These accounts pay a variable rate of interest and the banks set the rates. There can be a rule on how much you have to withdraw at one time and how many withdrawals you can make by check per month. Advantage: In high-interest periods, it usually pays more than passbook accounts; easy to open; convenient access; federally insured; combined bank balances (checking plus passbook plus money market) may get you a free checking account. Disadvantages: In low interest-rate periods, it pays about the same as a passbook account; monthly fees if your account falls below the required minimum balance.

Mutual Fund Money-Market Accounts - In this case money is pooled by a number of investors into a mutual fund that buys short-term securities like Treasury securities, high-quality bank certificates of deposit, etc. These are considered safe (some buy only U.S Government securities), and you can write an unlimited number of checks on the fund. Advantages: Higher short-term returns than with bank money-market accounts; liquid; diverse investments. Disadvantages: Don’t have federal deposit insurance; management fees.

Certificates of Deposit (CDs) - You deposit money (usually in a bank, savings-and-loan, or credit union) for a specified period at a specified interest rate. Your principal never fluctuates. Advantages: Interest rates usually higher than money-market accounts or passbook accounts; federally insured. Disadvantages: Penalty for early withdrawal.

U.S Treasury Bills - You loan money to U.S. Government when you buy a Treasury bill - or the other two Treasury securities listed below (Treasury notes, Treasury bonds). Treasury bills are short-term obligations that mature in three months, six months, or a year. They do not have a stated interest rate; you buy them at a discounted rate and your profit (interest) is the difference between what you pay and the face value when the T-bill matures. Minimum investment is $10,000. Advantages: Extremely safe; short maturities; exempt from state and local taxes; can buy directly from a Federal Reserve Bank. Disadvantages: High minimum investment; no interest payments; interest rates are usually lower than with longer-term investments.

This article has been submitted in affiliation with http://www.StockBee.Com/ which is a free online stock ticker quiz.

Gold coins are one of the most collectible objects in the World.
They have a beauty both visually and are incredibly tactile.
People actually derive pleasure from the touch of gold.
That feeling is heightened by the knowledge of the worth of a gold coin.

Regrettably there are many counterfeit coins circulating.
A few dealers frankly do not care as the coin is still a piece of gold.
However with collectible gold coins this is a more serious problem.

Most Fake Gold Coins are actually made of gold and the profit for the counterfeiter
comes in the difference between the value of the Gold and the value of the coin to a collector.

Generally speaking,more valuable coins are the fakers choice to produce.
That way they make more profit.

Gold is relatively speaking a very soft metal and the old test was to bite on the coin.
Coins pre 20th Century were usually made with pure Gold (or almost pure Gold)

Sadly this is no longer a valid test as modern Gold coins have varying amounts of base metals
added to make it easier to manufacture them and so that the coins will last in circulation.

One of the most faked coins is the US $20 Coin which has raised lettering near the edge.
The Real coins have these letter flats on the top.

In Counterfeit $20 Gold Coins in uncirculated condition these letters are rounded at the top.
It is fairly difficult to otherwise identify this coin as a fake as it is a usually made of the
correct amount of gold.

Other popular coins may be more difficult to identify.

So how do you tell a Fake?
Research is the proper answer. Your local museum or coin dealer will have some coins that you can
inspect and compare with suspect coins.

Find out the actual weight that a coin is supposed to be.This also applies to the measurements.
(One of the ways fakers make more money is to make the coins a tiny bit thinner but this is
noticeable on a coin scale).

Although Victorian Fakes of Sovereigns do exist, you are unlikely to come across them.
They were sometimes produced by using clay or plaster of paris moulds made from original sovereigns
and this produced a fairly clumsy forgery with blurred text and sometimes a very flat top due to
being filed with a fine steel file. These are obvious with a magnifying glass.

Fakes will often have other base metals added and the colour is then noticeably different.
Some Double Eagles have copper mixed to debase them a little and this gives them a mottled look.

Fakes to watch out for are the Tudor Angels and Half Angels as these fetch serious money .
If you are contemplating investing seriously in medieval Gold coins then please research before you buy.

Bullion Coins such as Krugerrands or Gold Sovereigns are less likely to be fakes as there
is little profit in them for the forger.

Keith Jones - I was a coin dealer for over 12 years.
To learn more about Gold coins and collecting Hammered Gold Coins please visit

http://www.hammeredgoldcoins.info
Where you will find lots of helpful information.