Posted on Wednesday, September 7th, 2011 | In Market Commentary
I have always been leery of the two big exchange traded funds, SLV and GLD, because they lease the gold and silver that they sell you. I much prefer the ETFs SGOL, CEF, PSVL and PHYS which actually own the gold and silver they sell you and store it for you segregated vaults. Words: 717
So says George Maniere (investingadvicebygeorge.blogspot.com) in an article* which Lorimer Wilson, editor of www.munKNEE.com (It’s all about Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Maniere goes on to say, in part:
I recommend that you move away from GLD and SLV and move instead into the physical funds such as the silver Sprott fund (PSLV) and the gold Sprott fund (PHYS). These funds are not true ETFs. They are closed ended funds which means you are not buying shares, but rather units. (The knock on the Sprott funds is that they carry a hefty premium, but that is only the case if you are going to take possession of the gold or silver.) The physical gold and silver is audited every year and you know that you will not wake up one morning to find that the gold and silver “leased” to GLD and SLV are now not worth the digital bytes they are printed on…
There are also two other fine companies that I want to diversify into as well. SGOL is the Swiss version of SLV except they really do own the gold and silver, unlike SLV and GLD which leases the gold. Central Fund of Canada (CEF), which holds both gold and silver in the Canadian mint, is also audited on a regular basis. While I own more than my fair share of physical, I like the ease of paper trades and I feel with these four holdings I get the safety of knowing that my gold and silver are not only real but that they are also liquid. To me it’s the best of both worlds.
Who in the world is currently reading this article along with you? Click here to find out.
The chart below shows that PSLV actually outperformed SLV in the run-up last April. I can only conclude that people, while they want gold and silver as a hedge against the debasement of currencies, they also want the safety of knowing their holding is backed by the underlying asset.
Whole oceans of ink have been spilled detailing the good and not-so-good points of the closed-end fund CEF (Central Fund of Canada) and the twin ETF’s GLD (SPDR Gold Trust) and SLV (iShares Silver Trust) funds. My goal here is to distill the salient points down to the fewest words possible to help make your due diligence task somewhat less…well…tasking. [Let's go!] Words: 650
The label “gold bug” may suggest a kooky old man who spends a lot of time in his basement reading conspiracy theory newsletters. The truth, however, is that there are many legitimate reasons to trade in gold and its derivatives. Gold has been proven time and time again to be an excellent “safe haven” investment, a holding that will appreciate in value during times of economic uncertainty. As such, gold may offer some valuable hedging and diversification benefits for a long-term portfolio. Words: 1002
Investors are looking for a safe place to put their money – an asset class they can “touch” and possibly trade even when no organized marketplace exists. That of course is the worst-case scenario and I do not believe it will get that far but the possibility is there and gold seems to achieve peace of mind for investors at the moment. As such, for me, GLD would be the only stock or ETF I would buy if I could own just one. Words: 862
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above
About FinancialArticleSummariesToday.com (http://www.FinancialArticleSummariesToday.com)
Lorimer Wilson is Editor of FinancialArticleSummariesToday.com (F.A.S.T.) and www.MunKnee.com (Money, Monnee, Munknee!) and an economic analyst and financial writer. He is also a frequent contributor to this site and can be reached at email@example.com