Opinions expressed by Entrepreneur contributors are their own.
While all that glitters may not be gold, people who invest inthis precious metal may find that over the long haul, it shows asstrong a return as the stock market, says financial analyst StephenLeeb.
Leeb, editor of the bimonthly newsletter PersonalFinance, is particularly bullish on gold and expects thatwithin the next three to five years, values will increasesignificantly.
"What drives bullion and gold is inflation. When inflationis low, gold prices are low; when inflation starts to accelerate,gold really starts to take off," explains Leeb, who saysit's hard to predict when gold prices will begin to go up.However, he says, inflation rates above 4.5 percent could signal agold price increase.
Gold can be purchased in bullion, gold mining stocks or in goldmutual funds. Prudent investors should not have more than 10percent of their portfolios in gold, says Leeb, whose top-ratedgold mutual funds are shown below.
"Our preferred buy is gold mining stocks in a gold mutualfund because a good gold mining company can do well even if goldprices don't take off," says Leeb. He also likes well-runmutual funds because the managers are typically traveling aroundthe world looking at mining operations. And that could be just theticket to striking it rich.
Heavy Metal
Top-rated gold mutual funds.
Ashanti Gold -- 233-21-772-190
Barrick Gold -- (416) 861-9911
Meridian Gold -- (702) 827-3777
Euro-Nevada -- (416) 480-6480
Delta Gold -- 02-9903-4000
Pioneer Group -- (617) 742-7825
Source: Personal Finance
Something Ventured
If you've avoided turning to venture capitalists because youthought they only look at high-tech firms, a finding by TheEntrepreneurial Advisory Service of Coopers & Lybrand LLP maymake you reconsider.
"We're seeing more venture capital funds that go afterlow-tech or no-tech businesses, such as manufacturing companiesthat specialize in certain products," says Sidney R. Andrews,a partner in the Houston office of Coopers & Lybrand. Accordingto Andrews, the increasing number of investors who have significantamounts to spend are leading venture capitalists to seek new, lesssaturated investment opportunities.
One thing that hasn't changed is investment standards,cautions Andrews. "It all boils down to whether the deal makessense," he says. "Does it have a concept that applies toa large market share? Will it be difficult for competitors toreproduce? How far ahead of the marketplace is the product? Isthere a good management team, and do they know what they'redoing?'
To find venture capital funds, Andrews suggests checkingPratt's Guide to Venture Capital (Venture Economics).Also investigate local capital networks, which can be located bycalling a nearby university or your state or local economicdevelopment department.
Small Shares
Entrepreneurs who want to raise $1 million to $10 million--butfind the cost of doing so through traditional securities markets alittle rich for their blood--now have another option.
"We view ourselves as an incubator where small businessescan grow with us and then go on to [a larger] exchange," saysNimish Gandhi, president and founder of Niphix, a Peoria,Illinois-based capital market started in 1993 that enables businessowners to sell shares directly to investors via an electronictrading system.
Unlike Nasdaq, where Gandhi says it could cost hundreds ofthousands of dollars to make an initial public offering (IPO), anentrepreneur can do an IPO for as little as $20,000 on Niphix.
Niphix targets small companies valued at a few million dollars,according to Gandhi. All investors are accredited and range frominstitutions and venture capital fund managers to wealthyindividuals with at least $200,000 in annual salary or a $1 millionnet worth.
Any business in the United States or Canada can issue an IPO onNiphix. For more information, call the company at (800) 780-6060 or(309) 674-0300 or visit the Web site at http://www. niphix.com
Contact Sources
Coopers & Lybrand LLP, fax: (713) 657-8221, sandrews@colybrand.com
Niphix, 331 Fulton St., #903, Peoria, IL 61602-1420,(309) 674-0300
Personal Finance, 1750 Old Meadow Rd., #301,McLean, VA 22102, (800) 832-2330
