Posts Tagged ‘investing’

What Is A Gold ETF?

Saturday, December 25th, 2010
In today’s uncertain economy, investing in precious metals such as gold and silver is becoming increasingly more popular. Many consider gold and silver as commodities with steadier and more reliable value than stocks or bonds.  The problem with buying heavy metal, however, is that it must be moved to someplace where it can be stored safely and it must be insured. The other obstacle is that when ready to reap some monetary benefit from it, it must be sold. All this is much more difficult than trading stock or other commodities. A Gold ETF resolves all these problems, however.

The term ETF stands for exchange traded fund. An ETF for gold is a purchase of the precious mineral that is traded on a major stock exchange. It usually is an investment in more than one company, and it is usually conducted on the American Stock Exchange. The New York Stock Exchange (NYSE) and NASDAQ both enable investors to buy gold ETF but not to the extent that AMEX does.

A gold ETF fund buys up a lot of gold and stores it. The fund then issues groups of ETF stock. The expectation is that the gold will go up in price, driving the shares of its stock up as well. Of course, the best gold ETF is one that has consistently delivered a profit for its shareholders. The first ETF for gold was introduced by Central Fund of Canada in 1961.

There are two distinct advantages to buying precious metals through an ETF. First, a gold ETF is the easiest way to buy bullion. As with any other stock purchase, all it takes is an online transaction or call to a broker to make it happen. Second, most ETFs allow an investor to purchase fractions of an ounce, which lets someone without a great deal of investment funds to take part in a gold buy.

There can as well be tax advantages to owning gold through an ETF. Many countries do not consider the ETF investor as an owner of the precious metal for purposes of taxation. Capital gains taxes are usually less for ETF trads than other more traditional mutual fund trades.  This is because of the way the trades are structured in ETFs. It is all very technical so I will not address it here, but it is enough to know that ETFs are considered a tax advantaged investment.

While some discount brokers charge no commission for their ETF services, .4 percent is common. Most brokers also charge a storage fee each year. Brokers in the United States usually charge a much lower fee, though they recoup their insurance, storage and fund management costs by periodically selling a little bit of each client’s gold.
If one wants to invest in gold a little at a time, a gold ETF is the way to do it.

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Investing In Gold For Sale

Thursday, December 23rd, 2010

With so many people looking into precious metals as an investment these days, one can find gold for sale from any number of sources. Some may prefer bars or bouillon while others prefer coins. In either case, it is important to understand the dynamics of gold for sale to understand what will be the best type of investment.

Many may consider 1 oz gold bars for sale among the many sizes available. When looking at gold bars, one should look to see how much actual gold is in the bar since this will determine its value. For instance, a bar that is .9999 is 99.99 pure. Bars of one ounce or ten ounces are very common, but some are also beginning to invest in kilo bars and 100 gram bars. The people who turn to kilo bars prefer this option because they are easy to store. However, kilo bars do not necessarily make the best investment, especially when using the U.S. Postal Service to transport them. Instead, 100-gram bars have slightly higher premiums and they can be shipped within the post office’s insurance limits.

Coins are also popular investments, especially for the collector. One may find antique gold coins for sale from a variety of sources. However, it is important that these coins are authenticated since much of the value of antique coins comes from their rarity. It is also important to know how to make distinctions among coins since some types are not as valuable as others. For instance, a Double Eagle gold coin is not the same as modern Gold Eagles.

Some investors may even look at gold and silver for sale when considering a worthwhile investment. As with gold, silver may come in the form of bars, bouillon and coins. For example, silver bars have grown in popularity because of the compactness and uniformity of their size that makes them easy to store. Gold and silver coins for sale come with their own sets of distinctions that need to be heeded when determining their value.

Finding gold for sale can be a safer type of investment when one knows how to determine what will reap the greatest rewards. One must research the trends in gold for sale and learn how to read where these trends will go. With a little patience and willingness to do the work; looking into gold for sale can create a feasible opportunity.

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