Gold Etf Exchange Traded Funds Invest in Gold

Whatever reason you want to own gold, be it as a hedge against inflation or the declining U.S. Dollar, or that you’ve heard that Gold price is likely to go up in the next few years.  Gold is a commodity that is worth investing in. A discussion with a broker  will help you find clarity.

Up to a few years ago you had two choices to own gold outright or own shares in gold mining companies. Disadvantages of owning gold outright is you have the responsibility of storing and keeping it safe, insurance plus high transaction costs in relation to buy and sell in the bargain.

Owning shares in a mining company carries the same risks as holding stock shares in any other stock traded company. Poor management in a company; increased operating costs and the price of stock can deflate while the price of gold rises. You don’t want to be caught and lose your investment.

Ownership of gold as a commodity such as coins and bullion can be a good diversification tactic. But you still carry the risk of keeping it safe.  Another alternative is to trade in StreetTracks Gold Trust, which caries the symbol of GLD, makes the purchase of gold so easy, just like purchasing normal stock in high profile companies such as Microsoft. Gold brokers can help and guide you in your choice.

This method of trading in gold is innovative, and offers a liquid and cost-effective way to invest in an asset that has up to now not been available to individual investors.

Some facts you should know about GLD: 

One unit of GLD, that is a share, represents a tenth of an ounce of gold. If the price of gold is hypothetically speaking $500 an ounce, one tenth will be $50.   You will find GLD traded on the New York Stock Exchange  The shares are designed to be cost-effective and as convenient way for inventors to be able to invest in gold.  Expenses are attractively low  – currently at 0.4%  It also grades at a discount or small premium to gold at any time. This is usually less than 1%.  GLD is extremely liquid; currently there are 66,900,000 shares outstanding. And daily volume of shares is approximately two million daily. Their assets are currently after less than one year’s trading, valued at $3,155,106,000.  The StreetTracks Gold Trust has proven to be one of the most successful new financial ‘kid on the block’ ever launched.

As with building any investment portfolios, a thorough research on the subject is the only way to become fully au fait with all aspects of investing in gold, physical gold, funds and shares. Good advice from a broker  can never be a waste of time. And you could come out with a good portfolio you can work with within your budget constraints.