A Gold ETF, AKA as a Gold Exchange-traded Fund, is a fund that aims to track the price of gold. While we’ll agree that tracking the price of gold is a sound investment idea––more on that in a moment––holding paper is not nearly the same as owning the physical metal. Because they are an exchange traded paper investment, ETFs are subject to all of the risks and liabilities of the stock market.
You may ask: What’s Wrong with the Stock Market? It’s at Record Highs.
This is true. But how long is that going to last and how did we get here? Has the market gone bullish as a result of strong fundamentals and best business practices? Or, is it more the result of years of Quantitative Easing and excessive printing of the dollar by a government desperate to meet its obligations? What happens when the dollar is printed excessively? We get inflation. To offset inflation with an ETF, just like stocks in the market, gains will need to be substantially high to offset potential debasing of the currency. And like the stock market, ETFs are subject to all of its volatility and market fluctuation.
Due to asset management fees charged by the fund house, the return will be less than the actual increase of the price of gold. Then there are the additional costs you’ll incur at the time of buying and selling in the form of brokerage or commission. Another disadvantage with paper Gold ETF ownership is the matter of its liquidity, they’re not as liquid as actual gold and this impacts their buying and selling flexibility. As it’s always a good idea to stick with funds that are liquid––this is an important aspect to consider as an investor.
ETFs Are Not Real Money
That is, unlike gold.
Gold has been a store of value for millennia. It has been an integral part of economies all across the globe. Even though gold is no longer considered the primary form of currency, gold is still one of the most solid, long-term investments around and can be an important form of protection for any investment portfolio. This is never truer than when experiencing a bear market.
In the U.S. the gold standard ended in 1971. At that time Gold was replaced with the dollar as the world’s reserve currency. Here’s the catch: Since then the dollar has lost 82% of its purchasing power.
Such has not been the case with gold. In real value, gold has maintained its value just as it has throughout history. This is why gold is considered real money. J.P. Morgan said it best: “Securities do not always prove to be good. Money is gold and nothing else… everything else is credit.”
Let’s say that again: Gold is money and everything else is credit.
Gold has no liabilities attached to it. It is the only currency in the world that can make this claim. Gold can’t be printed or debased. What better way to save for your retirement than the ultimate savings vehicle––physical gold.
Purchase gold from RC Bullion and count on the fact that your every purchase will represent a real purchase of physical gold.
Unlike paper investments, you will have 100% ownership of your physical gold and silver. Know that every purchase represents an investment in the actual metals, no promise to pay or percentage or future speculation, but an actual product of real value. At the time of purchase you will also have the choice of keeping your metals secure within an insured depository or taking direct delivery.
Before you invest any of your money, make sure to do your homework and get the best information available. You can begin by downloading a FREE Gold and Silver Investing Guide that will help answer many of your questions about gold and silver investing.
In our gold guide you’ll find answers to questions like:
Providing answers to questions like these and others, our Precious Metals Investment Guide offers many important money saving tips. This guide has helped teach many of our clients
