Precious Metals Pick: SPDR Gold Shares (GLD)
Click to EnlargeI’ve always recommended gold as a form of portfolio insurance. Why?
In spite of its poor performance in recent years, gold is still in a secular bull market and will remain so until the world’s central banks stop printing excessive amounts of money and governments stop issuing excessive amounts of debt. Gold, unlike fiat paper currency, cannot be created out of thin air. The Fed hates gold. All central bankers hate gold. Governments hate gold. Gold equates to discipline, and discipline is not, unfortunately, what central bankers and politicians are all about.
Your choices for physical gold are coins and gold backed ETFs. I own both, though most investors will want to stick to ETFs that own physical gold, as the liquidity is better.
Therefore, holding a fund like SPDR Gold Shares (GLD) is a smart move to counter geopolitical upheaval, inflation, and U.S. dollar depreciation.
This fund does not invest in shares of gold mining companies. Rather, it is a gold bullion fund (trust). GLD is intended to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold. It’s a relatively cost-efficient and secure way to invest in gold.