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How to Invest in Gold

Lastly, if you want to be more consumer-oriented in your precious metal investments, there are many publically owned companies that sell jewelry, across a wide segment of consumer tastes and income levels. At the high end is Tiffany (TIF), which designs, manufactures and sells jewelry of all sorts, including gold, silver, platinum, diamonds and other semi-precious stones. Tiffany is expected to grow earnings by approximately 30% in its current year and about 14% next year. The stock sells for approximately 16 times earnings, has an excellent balance sheet and is located in some of the finest shopping districts and centers of the world.

On the low end of jewelry retail, you have Wal-Mart (WMT), which is one of the largest jewelry retailers in the U.S, but it derives only a small percentage of its total revenue and earnings from the jewelry business. Also on the low end are the mall-based jewelers. You can often find three or four jewelry stores in a single mall intersection, which I call Jewelry Crossing. These often include Zales (ZLC), as wells as competitors Kay Jewelers, Jared Galleria and Littman Jewelers. Jay and Jared are owned by Signet Jewelers (SIG), and Littman is owned by Kroger (KR), which is primarily a supermarket and department store operator.

Who Owns Wal-Mart?

In general, I would stay away from the low-end retail jewelers. Zales is an endangered company and could find itself in bankruptcy in the not too distant future. Signet, a better operator than Zales, earned $1.92 a share last year and 60 cents a share in the first quarter of this year. First-quarter same-store sales rose 5.8%. Signet is worth watching, but I would not act until we see its second-quarter results, which the company plans to report this month.

-- Written by Scott Rothbort in Bolton Landing, N.Y..

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At the time of publication, Rothbort had no positions in stocks mentioned, although positions can change at any time.

Scott Rothbort has over 25 years of experience in the financial services industry. He is the Founder and President of LakeView Asset Management, a registered investment advisor specializing in customized separate account management for high net worth individuals. In addition, he is the founder of TheFinanceProfessor.com, an educational social networking site; and, publisher of The LakeView Restaurant & Food Chain Report. Rothbort is also a Term Professor of Finance at Seton Hall University's Stillman School of Business, where he teaches courses in finance and economics. He is the Chief Market Strategist for The Stillman School of Business and the co-supervisor of the Center for Securities Trading and Analysis.

Mr. Rothbort is a regular contributor to TheStreet.com's RealMoney Silver website and has frequently appeared as a professional guest on Bloomberg Radio, Bloomberg Television, Fox Business Network, CNBC Television, TheStreet.com TV and local television. As an expert in the field of derivatives and exchange-traded funds (ETFs), he frequently speaks at industry conferences. He is an ETF advisory board member for the Information Management Network, a global organizer of institutional finance and investment conferences. In addition, he is widely quoted in interviews in the printed press and on the internet.

Mr. Rothbort founded LakeView Asset Management in 2002. Prior to that, since 1991, he worked at Merrill Lynch, where he held a wide variety of senior-level management positions, including Business Director for the Global Equity Derivative Department, Global Director for Equity Swaps Trading and Risk Management, and Director for secured funding and collateral management for the Global Capital Markets Group and Corporate Treasury. Prior to working at Merrill Lynch, within the financial services industry, he worked for County Nat West Securities and Morgan Stanley, where he had international assignments in Tokyo, Hong Kong and London. He began his career working at Price Waterhouse from 1982 to 1984.

Mr. Rothbort received an M.B.A., majoring in Finance and International Business from the Stern School of Business, New York University, in 1992, and a B.Sc. in Economics, majoring in Accounting, from the Wharton School of Business, University of Pennsylvania, in 1982. He is also a graduate of the prestigious Stuyvesant High School in New York City. Mr. Rothbort is married to Layni Horowitz Rothbort, a real estate attorney, and together they have five children.

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