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<p>[QUOTE="Cloudsweeper99, post: 677203, member: 3011"]SLV and GLD have some drawbacks. First of all, there is no assurance that they actually own the metals. The prospectus only promises that they will attempt to track the metal prices -- not that every share will be backed fully by metal. This might not mean anything, or it might become critical depending on the state of the market at some unknown future date. They also require special tax treatment if held in a taxable account. Buying and selling in an instant is as much a negative as a positive because you are more likely to bail out with a small gain in a bull market and miss the once in a lifetime opportunity that might lie ahead. DBC holds futures contracts, not commodities. They roll them as they come due. Since most near and distant futures contracts are higher than the spot price, they are constantly rebuying at higher prices than they sell. In theory this can be profitable, but in practice a lot can go wrong. It also has some complex tax implications.</p><p><br /></p><p>Bottom line -- there's no free lunch. Every investment has something wrong with it. Buying physical gold and silver is more trouble but also safer.[/QUOTE]</p><p><br /></p>
[QUOTE="Cloudsweeper99, post: 677203, member: 3011"]SLV and GLD have some drawbacks. First of all, there is no assurance that they actually own the metals. The prospectus only promises that they will attempt to track the metal prices -- not that every share will be backed fully by metal. This might not mean anything, or it might become critical depending on the state of the market at some unknown future date. They also require special tax treatment if held in a taxable account. Buying and selling in an instant is as much a negative as a positive because you are more likely to bail out with a small gain in a bull market and miss the once in a lifetime opportunity that might lie ahead. DBC holds futures contracts, not commodities. They roll them as they come due. Since most near and distant futures contracts are higher than the spot price, they are constantly rebuying at higher prices than they sell. In theory this can be profitable, but in practice a lot can go wrong. It also has some complex tax implications. Bottom line -- there's no free lunch. Every investment has something wrong with it. Buying physical gold and silver is more trouble but also safer.[/QUOTE]
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