Investments

[GRH]

Originally Posted by ila

From all I've ever heard, when one buys gold one is just buying certificates of ownership and it's not possible to actually touch the gold. Since I don't have firsthand experience I don't know for sure.

Absolutely wrong. There are a variety of ways to own gold. One includes certificate form, typically issued by mints. Another way to own is through pooled accounts, such as Kitco.com sells. The advantage to the pool account is a high degree of liquidity coupled with relatively low bid/ask spreads (making it easier to trade to profits). Plus, the pooled accounts aren't reported for tax purposes...Yet another advantage. You can also purchase shares of gold or silver ETF's, which are trust funds which actually (by obligation supposedly) own the underlying metals for each share owned. Typically, the shares of the ETF track the metal based on spot market prices, so the idea is to buy low and sell high. You can also redeem your shares of the ETF's for physical possession of the underlying metals, however, you have to redeem them in Creation Units, which means you have to have like 50,000 shares (or some other ridiculous amount of exposure) in order to actually take possession of the metals.

Finally, you can actually own precious metals by going to any number of reputable metal vendors or coin dealers. There are two ways to actually own the metals. For one, you can own bullion, which is basically to say that you just own ounces of metal. Secondly, you can purchase numismatics where you own precious metal, but it is in the form of a collectible coin. I for one collect coins, and every year I buy silver coins in the form of American Eagles, Canadian Maples, and Chinese Pandas...And I've also been collecting the silver coins of the Australian Mint. Because I'm buying uncirculated, mint-quality coins, I naturally pay a premium to own these coins. However, I also buy a decent amount of bullion. Bullion includes coins which have been scratched (or for some other reason have lost their collectibility) as well as bars of silver and gold. For the record, most of the bullion and coin that I buy is in the form of silver...Gold is too rich for my blood right now.

Of course, when you own any significant portion of gold or silver, you have the worry with how to protect it. It is very expensive to insure, otherwise you have to purchase a safe, or buy a safe-deposit box or some other form of insured storage.

And for our American posters, the US government even made it legal to hold gold or silver in an IRA portfolio. There are several companies which specialize in the storage of gold and silver (which you can take possession of). Of course, there are maintenance fees on these types of investments, which eat into your principle investment. The only stipulation is that the gold or silver has to be triple 9, so that rules out some forms of gold such as South African Krugerands.