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Gold ETFs Allow You to Invest in Gold Without Investing in Gold
When the market turns sour, investors tend to initiate a “flight to safety” strategy. Flight to safety means leaving risky investments like stocks and adding more stable investments to portfolios like high-rated, low risk bonds. Another “safe” investment that investors tend to add to their portfolios during times of duress is gold, since it is the theoretical staple of our economy.
However, stocking up gold bars in your attic like a mini-Fort Knox, might not be the most efficient method of stabilizing your portfolio. There is an alternative to burying a chest of gold doubloons in the sand.
What are Gold ETFs?
Enter Gold ETFs. Gold commodity exchange traded funds are a simple way to expose your investment strategy to the performance of gold, without actually owning any gold products. There are many types of gold ETFs, some of which consist of futures and derivative contracts in order to track the price of gold and gold-related indexes, while others consist of gold assets held in a trust. There are even gold ETFs that track companies in the gold industry.
For example, one of the most popular gold ETFs is GLD, the SPDR Gold Shares ETF. In the case of the SPDR gold ETF, you do not actually own the gold assets, they are held by a Trust. The Trust issues baskets in exchange for deposits of gold for when the baskets are redeemed. So, you have exposure to the price of gold, but don’t have a pile of gold coins sitting under your desk.
Read More: http://www.stockgoldmarket.com/gold-etfs-allow-you-to-invest-in-gold-without-investing-in-gold
