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Should a cheapskate buy low premium or low spread?
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<p>[QUOTE="Info Sponge, post: 694035, member: 20538"]Performance comes and goes, but expenses are forever.</p><p><br /></p><p>So imagine someone buying physical but trying to shave every possible basis point off their deals.</p><p><br /></p><p>One approach would be to go for the lowest premiums, so as to get the most gold per dollar. That would take you to odd and relatively unpopular sizes like the 100 Corona, and away from the relatively pricey Gold American Eagles.</p><p><br /></p><p>But wait, there are two sides to an investment, buying and selling. A round trip deal on 100 Coronas (buy and then sell immediately) at Apmex today would cost you 3.6% of your total. A round trip on AGEs would be only 2%.</p><p><br /></p><p>So would our hypothetical shrewd investor buy AGEs? The problem is that the premium might disappear over time, creating a loss even if the price of gold were steady.</p><p><br /></p><p>At which point our hypothetical investor might shrug and say "Don't sweat the small stuff", but then again might say "A penny saved is a penny earned".</p><p><br /></p><p>Thoughts? Assuming the hypothetical cheapskate has ruled out electronic solutions like GLD or Bullionvault.[/QUOTE]</p><p><br /></p>
[QUOTE="Info Sponge, post: 694035, member: 20538"]Performance comes and goes, but expenses are forever. So imagine someone buying physical but trying to shave every possible basis point off their deals. One approach would be to go for the lowest premiums, so as to get the most gold per dollar. That would take you to odd and relatively unpopular sizes like the 100 Corona, and away from the relatively pricey Gold American Eagles. But wait, there are two sides to an investment, buying and selling. A round trip deal on 100 Coronas (buy and then sell immediately) at Apmex today would cost you 3.6% of your total. A round trip on AGEs would be only 2%. So would our hypothetical shrewd investor buy AGEs? The problem is that the premium might disappear over time, creating a loss even if the price of gold were steady. At which point our hypothetical investor might shrug and say "Don't sweat the small stuff", but then again might say "A penny saved is a penny earned". Thoughts? Assuming the hypothetical cheapskate has ruled out electronic solutions like GLD or Bullionvault.[/QUOTE]
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