Investment Q&A

There are lots of options, but we see the best solution as a gold bullion ETF. We prefer gold over silver as silver has industrial uses and is therefore more tied to the economy as opposed to a store of value as gold is. Holding coins and bars has many drawbacks, including storage and security issues. Coins are taxed differently. A bullion ETF removes all these issues for a relatively low management fee. Most ETFs can see units converted into gold if desired (in minimum, large amounts). This feature helps ensure the ETFs trade near the price of gold and not at a discount. We are fine with gold stocks such as AEM, FNV, AGI but gold stocks are still stocks and they can act differently than gold. In the 2008 financial crisis, only two asset classes went up--gold and the US dollar. Gold stocks still declined. We think a combination of an ETF such as PHYS and a couple of gold stocks would be the best approach for a new investment in the gold sector.