ETF Research and Analysis
by Paul Justice, CFASuitability
For most investors, owning gold makes sense as a hedge against the loss in purchasing power of paper currencies. Governments have historically been lousy stewards of the value of their currencies, and a gold position can help hedge a portfolio Read more
For most investors, owning gold makes sense as a hedge against the loss in purchasing power of paper currencies. Governments have historically been lousy stewards of the value of their currencies, and a gold position can help hedge a portfolio Read more
Bull Case
A gold ETF offers pure exposure to the price of bullion without the worry of actually storing the metal.
As a hedge against the loss of purchasing power of paper currencies like the U.S. dollar, gold can have a place in a portfolio.
Trading volume is healthy, which could lead to lower bid-ask spreads than for competing gold ETFs. While the possibility of tight spreads isn't a reason in itself to invest here, especially if the decision is founded on a long time horizon, it's welcome insofar as it reduces uncertainty associated with any investment here. Read more
Bear Case
Because there's no intrinsic value to gold--it's worth whatever people want to pay for it--the trend in future prices is nearly impossible to predict.
The best time to buy precious metals is when they're out of favor. Now that gold has been on a multiyear run, investors getting in now could be sorely disappointed. Read more
The Best ETF Sector Idea for 2010
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