Marc SimpsonGrowth & Synergy Consultant

The ABC Bullion Group

The ABC Bullion Group

Australia’s largest private bullion refinery

Incorporated into group in 2012

Australia’s largest private bullion co.

Founded 1971

Sydney Head office – Hong Kong – Perth*

High-tech private vaulting facility

Secure discrete storage

Opened 2013

EBS Refinery

Australia largest private bullion refinery

Ingot casting, minting, alloys

Acquired 2012 to compliment integration plans

National Assoc of Testing Authorities accred pending

London Bullion Market Assoc. accred 2015

ABC Bullion

Australia’s largest private bullion company

41-year history

Over $1 billion turnover 2012-13

ABC Bullion bars recognized nationally & Asia

Exclusive distributor of PAMP brand in Australasia

Custodian Vaults

Sydney’s newest, high security private vault

Easy accessibility – CBD location, extended hours

State-of-the-art physical and electronic security

Discrete, personalised & professional

Store - bullion, jewellery, data, valuable items

Disclaimer

This presentation is for educational purposes only and does not constitute financial advice, either general or specific.

It does not consider any particular persons investment objectives, financial situation or needs. Accordingly, no recommendation (expressed or implied) or other information should be acted on without the appropriateness of that information having regard to those factors.

You should assess whether the advice is appropriate to your individual financial circumstances before making an investment decision. You can either assess the advice yourself or seek the help of a financial planner.

Topics We’ll Be Covering

• The GFC and unresolved challenges facing the developed world

• Protecting wealth and the outlook for traditional assets

• Defining gold

• Why the bull market in precious metals is unlikely to be over

• A portfolio example of gold protecting wealth

GFC: 50 years in the making

Demographic challenge

Social Security: Workers per Beneficiary

Welfare state unaffordable

71%

127%

224% 235%

0%

50%

100%

150%

200%

250%

GDP Social Security Medicaid Medicare

Projected Growth v Mandatory Spending - 2007 to 2032

Government won’t stop spending

Total faith in central bankers?

• “I don’t buy your premise. It’s a pretty unlikely possibility. We’ve never had a decline on house prices on a nationwide basis” –July 2005

• “The impact on the broader economy and the financial markets of the problems in the subprime market seems likely to be contained.” – March 2007

• “The Federal Reserve is not currently forecasting a recession” –January 2008

• “The GSE’s are adequately capitalized. They are in no danger of failing.” – July 2008

• “The Federal Reserve will not monetize the debt” – June 2009

• Question: “You have what degree of confidence in your ability to control inflation?”

• Answer: “100%” – December 2010

Global economy weakening!

Outlook for Traditional Assets

CASH & TERM DEPOSITS

EQUITIES

BONDS / FIXED INCOME PROPERTY

Shares are not without risk

0

5

10

15

20

25

30

35

40

45

50

1881 1891 1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011

Shiller S&P 500 Price Earnings History

-67%

-78%

-61%

Bonds are near all time highs

0

2

4

6

8

10

12

14

16

1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

US 10 - Year Borrowing Costs (%)

Property already expensive

The low rate magic is over

Physical Gold & Precious Metals

Gold is Money

“Nations, differing in language, religion, habits and on almost every other subject susceptible of doubt, have, during a period of near four thousand years, agreed in one respect: that gold and silver have, uninterruptedly to this day, continued to be the universal currency of the commercial and civilized world.” – Albert Gallatin

“Betting against gold is the same as betting on government – He who bets on governments and government money bets against 6000 years of recorded history” – Charles De Gaulle

Which is why we store it

Gold has a Unique Stock to Flow Ratio

Sovereign Gold Reserves

Country Gold Holdings% of Foreign

Reserves

United States 8,133.50 71.6

France 2,435.4 66.5

Germany 3,390.6 68.6

Italy 2,451.8 67.0

Gold excels in times like these

Opportunity cost is low

Yields 1980’s

US Cash 19.10%

US 10 Year Bonds 16.00%

Australian Cash 13.40%

Australian Property 9.50%

Australian Shares 9.00%

Today Outlook

0.25% Staying Down

2.00% Debt at all time highs

4.45% Heading Lower

4.00% Near all time highs

5.10%Valuations Extreme in banks

Gold market corrections

Reallocation potential is huge

Fixed Income53%

Equities37%

Cash + Alts10%

Gold's Share of Total Financial Assets

Source: World Gold Council, World Federation of Exchanges, Credit Suisse

History says gold is still cheap

A Repeat of the 1970’s

The 4 most dangerous words in investing are

“This time it’s different”

Sir John Templeton

Portfolio Construction

$1 million portfolio 10 year time horizon

Paul 100% Utopia 0% Gold

Bob 75% Utopia 25% Gold

Asset Class Return Projections*

Utopia

Alternative Scenario

Market Crash

Australian Equities 9.50%

-60%Global REITS 8.00%

Government Bonds 3.10%

Diversified Growth Mix 7.70%

Physical Gold -50% +600%

Market crashes do happen

Asset Classes Largest Losses

Australian Equities -55.0%

Small Caps -60.9%

InternationalEquities

-48.7%

Emerging Markets -44.1%

Infrastructure-46.9%

REITS -70.6%

Australian Bonds -22.5%

Gold +2500%

Protection pays dividends

Paul

Bob

Difference (Bob vsPaul

In Utopia, Bob ends up with $8 for every $10 Paul has

In Market Crash, Bob ends up with $4.50 for every $1 Paul has

Market Crash

$400,000

$1.80 million

$1.40 million

Utopia

$2.10 million

$1.70 million

-$400k

Gold and your portfolio

• Proven portfolio diversification benefits

• Currency hedge

• Cheap by historical standards and perfect economic environment

• Only asset without third party risk or an attached liability

• Highly liquid

• Simple and easy to trade