Investors have a wide array of options when it comes to investing in gold. Whether you’re planning on loading up on gold bars or bullion (which will have carrying/storage costs, meaning somewhat of a negative yield), investing in individual gold miners or related companies, or buying an exchange traded fund (ETF) that tracks either of these, putting your money to work is the easy part.
The hard part is choosing which investing medium is right for you. For investors looking for exposure to the price of gold but don’t want the excess risk or leverage provided by mining companies, and don’t want to spend money on storage costs for gold coins, buying into an ETF like GLD could be the way to go.
GLD is a unique ETF that is designed to track the price of gold closely, removing much of the idiosyncratic risk involved in the process of investing in a single gold miner, or even a group of mining companies.
This is perhaps the single simplest way for any investor to add a position in gold, either as a hedge, or as a pure play investment in the yellow precious metal. For any semi-passive investor like myself who is seeking some exposure as a hedge, but honestly doesn’t want to spend the time researching gold mining firms to find the best fit, GLD is a great option.
This is a highly liquid fund, allowing investors to easily move their gold into cash almost instantaneously, something that is not easy to do with physical bullion, and does not require storage.
Invest wisely, my friends.
