For those who delve into the gold markets, what are you thoughts on the Exchange traded gold and silver funds known as Spyders. GLD for gold and SLV for silver. The markets are unstable but these offer a way to track the price of gold, a step from owning the actual metal. How about the oracles stepping up to discuss this item ?
Have money in both. Very easy to trade and with certain accounts you can buy in small volume. Also no premiums. I have an account with ING Direct. I can buy any amount at a time it is just a flat 9.95 per transaction. Buy 20 shares of silver and its like getting it at a 50 cent premium. Can't really go wrong. I would stick with GLD and SLV though. They actually hold an oz per share or with in a few percentages. Some of the smaller ones only buy one oz for every two shares. Don't really understand how they managed that.
I watch them both and hold shares of SLV. At the moment, I think silver is a better place to be buying right now due to all the current state of gold, unless gold drops below 900/oz range or further, but don't overlook that you can find ETFs in other metals too: platinum, palladium, copper, etc. Each metal has it's market and you need to understand the factors and how they affect each other. ETFs are indeed easy and offer access to metals (a particularly volatile market, so do your research constantly) especially if you cannot afford or do not want to deal with physical or do not want to get into long term PM sector funds sometimes offered in retirement funds or from brokers. If you are thinking about getting into the ETFs really do your research and understand how these funds work. It can't all be explained and written for you here. After you get some feedback from those of us on CT you should order a proper prospectus and really read the fine print on risk and the ETFs holdings before you buy. If you have a "financial advisor" consult them. :thumb:
Thanks ; If the stimulus money is sent in the direction where it is intended, The Federal Reserve will turn loose a lot of recently printed money on a path to no good. Inflation will be the ultimate result. Trying to do everything at one time has put an amount of pressure on the country and world that cannot be substained. Money in a bank will disolve like a shirt left in a bucket of bleach over night . I believe Spyders in gold and silver are a good quick back up for cash on hand. How does everyone like the "Change" ? Lot of people are taking a lot of valum these days as well as other self prescribed drugs. Pep
People invest in PMs to hedge against inflation. PMs historically hold their value and seldom are a loosing investment, especially if you can hold them for the long term and/or make a killing in the short term selling them provided you are able to time the sell correctly. The spectre of inflation is looming but that spectre, like inflation itself, will not last indefinitely. "Nothing endures but change. -Heraclitus Commodity ETFs are a good option for some investors. Individuals should do the necessary research to find out if they are right for their investment arsenal.
I would be careful with GLD and SLV. Read the prospectus. First of all, it isn't entirely clear that they hold the gold and silver implied. The prospectus indicates they are intended to "track" the price of gold and silver by making shares convertible to metal under certain circumstances. It doesn't say each share is 100% backed by metal. There is also the issue of short sales. Because of shorting, there are more shares owned by investors than have been issued. The rest are backed by promises to repurchase, not by metal. In a real financial crisis, this might become critically important. Another factor is the management expense deductions. Since both have been in existence for awhile now, there is less than 1/10 ounce of gold per GLD share and less than 1 ounce of gold per SLV share. They are wasting assets. Another little headache, assuming you want to stay within the law, is the tax treatment. Both are flow-through entities that require some tricky tax work if you hold them in taxable accounts and comply with the tax code. They are also treated as collectibles when sold. In short, it isn't a slam dunk sure thing that they are suitable for everyone who owns them You have to study them and conclude that the negatives represent an acceptable level of risk that is greater than owning a coin.
Just some info to share with those on this thread interested in PM ETFs vs. bullion. There's an interesting headline off Bloomberg this morning about Greenlight Capital (a hedge fund) moving all holdings out of gold ETF into physical bullion, story here: http://bloomberg.com/apps/news?pid=20601213&sid=a16aPkJLxw0w They're quoted as saying this in regards to offsetting inflation, “At a minimum this will provide some savings as the costs of storing gold are less than the fees for the SPDR Gold Trust" Also note PMs look to be rising in the pre-trade on 7/15: gold spot around $933, silver back up over $13.20s
Howdy folks, Nice thread. I presently own a some SLV in a deferred retirement account and have owned some GLD. I concur with cloudseeker that there is a serious question in the gold-bug community as to whether or not they really own the metal itself or does some of their holdings consist of 'paper' bullion. There is also the specter of naked short selling (selling shares you don't own). At one time last year, there was more paper silver being traded on the futures market than exists in physical form on the earth. If the sh*t hits the fan are you going to be able to get your money out? Most purists believe VERY strongly in owning the real stuff - hard, hands on physical bullion. As a collector, I like gold and silver type sets from around the world. For survivalists, it's bagged 90% US circulated coinage. In summary: I like GLD and SLV for trading and speculation purposes, but real bullion as an investment. You MUST own GLD and SLV in a tax exempt or deferred account because the capital gains are taxed at 28% as collectibles. In a taxable account, you want to own CEF (Central Fund of Canada) which is a closed end fund owning both gold and silver bullion in about a 55/45 ratio. It's taxed at 15% on cap gains. peace, rono
I disagree with this last statement. CEF is a PFIC and subject to some of the most complex tax rules on investments. As a PFIC you must pay tax on the change in value at ordinary income rates regardless of whether or not you sell the stock, or file some complex paperwork every year to apply for an exemption. CEF is better off in a tax deferred account also.
Good info All have thrown in some ideas, positive and negative. I like bullion but at times an ETF can be moved into or out of and the speed of a good connection. I would not hesitate to own along with bullion or collectable gold but but no more then 5-10% vs bullion. The stock market is shakey at best. Many large companies are not looking at the investors needs but what is takes to make money for the company. Those are not always always in the interest of the stock holder. General Electric seems to be in bed with the feds on banking and energy. What they get back remains to be seen. At a startling 10 dollars and change per share they are very cozy with all new energy and cap and trade. We still need oil as a bridge product until a solid source is able to supply at resonable costs. Private corporations will make vast sums by raiding Americans wallets. This will be a travisty to those who are older and need energy when at home most of the time. While votes exist to do harm , this administration is pushing through things that are not only not tested but not even read by Congress. We search for secure areas to keep our minds at ease and not let our dreams go to the U.N. or any other organization that would do America harm. Pep
Changes I have held gld ,slv for quit a time. I think with what I read that it is high risk, high return possibly. That is the best I can do. I pulled the pin and will hold my own Pms and keep the stocks I have remaining which is about 25% of what I had in 2005 & 6 . Making mistakes now is not a wise thing to do. Property will go to my family and should get all to school if they want. No school, no money. They can call me the old BA$TARD but that is ok. Ingnorance is for life if you do not help your self. Pep
While this thread has addressed paper PMs and ETF PM investments, and a lot of folks are curious/cautious about PM investing, another way to diversifying your investments and retain their value is to consider participating in a Precious Metal IRA. You are allowed to use certain PMs (like American gold eagles) to fund a government sanctioned IRA. APMEX suggests these Precious Metal IRAs: Gold Star Trust or Sterling Trust Co.
IRAs Well that is nice. Someone thought is was good and they ( IRAs) are a fine way to save for retirement. The gold will go on a 1040 as will who the PM was bought from. The more the Government knows about where money is , it makes them drool. I really do not think they will tap gold but they are going after every nickel and dime they can lay claim to. So being paranoid I look at everything from all sides if possible. I still miss some opportunities.and nail others. Pep
Hi Cloudsweeper, Good point, but they really try to make it easy. Granted they are a PFIC. However, note the link from their homepage. Also, most of us lazy *******s use tax software and with it, PFICs and MLP's are pretty mundane stuff. They used to scare me to death with the Schedule K's and all, but any more my TurboTax will link and download directly from the various companies. However, be that as it may, the big issue is that GLD and SLV are poison in a taxable account due to the 28% tax on cap gains. From my perspective, they're for trading/speculation in a deferred acct ONLY. For investment purposes, I'm old fashioned and prefer the real stuff that I can hold in my sweaty (but wearing white gloves) hands. http://www.centralfund.com/pfic/PFIC2008.pdf In case my attached link didn't work. Take care and good catch, rono
Tax Cut and TurboTax might be okay for MLPs, but be careful with PFICs. I don't believe that either package includes form 8621 which must be filed to either calculate the tax due annually or make the QEF election to defer the tax. And if you don't file the form, in theory the tax becomes 100% of your gain if the IRS happens to audit your return. I say theory because I don't know of anybody that had this happen to them, but I wouldn't sleep well at night knowing I had that exposure.
Amazing ! A good citizen worried about exposure , and the Government continues to buy votes and pays for them with your treasury money ! Is this a coup d`etat , or maybe a coup de`grace. A lot of fine people are being had, just for being good citizens. They count on it ! We are taxed and our money is diverted via pork barrel spending. We still manage to got a few pieces each year and get our kids through college. My to daughters sat to gether one day and said Dad, we are not going to go through what you and mom have, we are not going to raise a family in this era. Their legacy is a good education and what ever we leave. Pep
Pepperoni, I think you are being overly negative. Life is tough; always has been and always will be. To expect otherwise is unreasonble. But that isn't any reason not to try to raise a family "in this era" or do anything else in life that you would consider doing under "perfect conditions" which will never exist.
Ok I hope for the best but have found over seventy years that some things just do work out but very few. I have seen first hand in a country near V/Nam the destruction of a society. We could not do a thing about it. We could recon and measure how many more lives it would take to save a large piece of realestate and the population. When certain signs look like what the are do not wait for a an answer. Fix it or get out. I believe we are being inidated with propaganda from news papers and other elements that wil cause long term damage to our country. No this is not the first time groups have tried to take down America. But I do believe we had better get as much real information about what is really happening from outside and within. The world is in the dires. If we had been the only country that had been involved in this situation I would say we need to do some readjusting. When the whole world owns our debt and we are spending still more that is destructive to those who trusted our ability to pay our bills. You tell me what comes after what has happened ! Paranoid, you BET ! Conservative YES. Do I believe in our founding documents YES ! DO I like war NO ! Even old Military people know that the ultamate sacrifice never goes away. I am a realist, and what I see, hear, and know I react on. If I do not know what to do, I do nothing until I get orientied. I respect what you write . You are entitled to have a say. None of us are prepared or told what direction all this is going but connecting the dots makes a rather unsavory picture. The primary job of the President is not to protect the people, it is to use the Constitution as the legal law of the land. Pep
