equity etf’s invest in actual company stock that are represented in the index they mirror
there is no "Gold Index" for an ETF to mirror unless it is just an index of gold mining company stocks
I don;t know if there are any kind of investment vehicles you can buy that actually buy gold bars
equity etf’s invest in actual company stock that are represented in the index they mirror
there is no "Gold Index" for an ETF to mirror unless it is just an index of gold mining company stocks
I don;t know if there are any kind of investment vehicles you can buy that actually buy gold bars
References :
If you mean gold companies when you refer to equities, you not only have to consider the price of gold but also whether the company is any good.
Most Gold ETF’s track the price movement of gold. The best one is GLD.
10 GLD ETF’s = 1 ounce of gold – minor storage costs.
https://www.spdrs.com/product/fund.seam?ticker=GLD
References :
Equities pay dividends maybe. Gold ETFs do not. That is the main difference. One might also mention the equities have earnings. Gold does not, but there are more than just a few equities these days that do not have earnings. Secure? There is virtually no security these days. Too many crooks out there ready to clean you out. Many of them in Washington or where ever your national capital might be situated.
References :
The two gold ETFs are GLD (the largest) and IAU offer a way to invest in gold and profit from its rise in price. The caveat being that you can’t take delivery of that gold the ETFs invest in, so you are technically buying "paper" gold.
As far as to the "security" of these gold ETFs, you have to trust that the custodian is actually going out and buying the gold and that it is stored for you in their bank. This is supposed to be confirmed by auditors.
One thing to think about, is if there is a huge demand for gold (more buyers than sellers), they have to go out and find the gold somewhere to purchase for the buyers. Where do they go if this demand is huge? The other side of the coin is if there is a mad exodus in gold, who will they sell the gold to if no one is buying?
Personally, I just don’t trust it, but would definitely "trade" it.
In analyzing the second part of your question, I assume you mean "precious metal" (PM) equities and not just equities in general (like the S&P 500). There is an ETF that can accomplish this for you called GDX. GDX contains 31 gold mining company securities, mostly from Canada.
The difference between the GDX and GLD is that sometimes gold will lead PM’s and other times PM’s will lead gold higher.
Last year, after gold hit is all-time high in March, precious metals started a huge decline through October while gold did fall, but rebounded and has held steady of late, only increasing more lately because the dollar index has fallen to its historic trend line of 80 (just broke a little below today – 5/22/09).
The stocks since November have been catching up to gold and still are not at their March highs of 2008.
Once gold breaks to a new high, you’ll see these stocks lead gold as speculators come in and ride the wave (doesn’t mean there won’t be a pullback first). The last thing the Fed wants is for gold to outshine the dollar (especially since China and Japan won’t be happy). But that’s also why China is increasing their gold supplies.
I wrote a White Paper that goes into more detail on gold as an investment. You can download it for free at http://www.fedupbook.com/whitepaper
References :
GLD Prospectus http://www.spdrgoldshares.com/sites/us/prospectus/
IAU Prospectus http://us.ishares.com/library/docs/prospectuses.htm?investorType=FP
GDX Info: http://etf.stock-encyclopedia.com/GDX.html