Gold
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Introduction
| “The desire for gold is the most universal and deeply rooted commercial instinct of the human race.” | |
| — Gerald M. Loeb | |
Gold can be added to a portfolio by several different means[1]:
- As the metal, either as bullion or gold coins.
- As gold certificates.
- As ETFs that hold only gold.
- As precious metals funds.
- As stocks in gold mining companies.
A good source of information on gold and on current gold prices is Kitco.
Many advisers consider gold as an extra asset class, and recommend keeping a modest amount (say, 5-10%) in your portfolio. Some commentators (known as "gold bugs") are extremely bullish on gold, and recommend holding most or all of one's portfolio in gold.
Physical gold bullion in quantity has to be stored in secure vaults under guard. This storage has a "cost-of-carry", which usually results in a forward charge called a contango.[2]
Buying Gold
Gold Coins or Gold Bullion
Most major cities have gold dealers. Gold can also be ordered from major dealers like Kitco. Individual gold is generally bought in the form of gold coins. The gold Maple Leaf bullion coin made by the Royal Canadian Mint can be purchased at the main branches of many Canadian banks.[3]
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| 1 oz. Maple Leaf | 1 oz. American Eagle | 1 oz. Krugerrand |
Gold Certificates
Certificates representing various quantities of gold can be purchased from major brokerages.
Gold ETFs
Several ETFs that track the price of gold are available. Investors can also consider the iShares S&P/TSX Global Gold Index Fund, TSX symbol XGD, which tracks the stocks of gold mining companies, rather than the gold price (see below).
Precious Metals Funds
A list of precious metals funds can be found on Globefund.[4] Many of these funds hold other precious metals like platinum, as well as gold.
Gold Stocks
Major gold companies can be identified by examining the composition of XGD, the iShares S&P/TSX Global Gold Index Fund,[5] which holds major world companies. Several of these companies trade on the Toronto Stock Exchange, and are included in the broad stock indexes. The remaining holdings trade on American stock exchanges as either stocks or ADRs.
References
- ↑ Wikipedia, Gold as an investment, viewed Feb. 21, 2009.
- ↑ Wikipedia, Contango, viewed Feb. 22, 2009.
- ↑ Royal Canadian Mint, FAQ:Shopping, viewed Feb.22, 2009.
- ↑ Globefund, Precious Metals Equity, viewed Feb. 22, 2009.
- ↑ iShares S&P/TSX Global Gold Index Fund, viewed Jan. 17, 2012.
