Conventional Gold

CONVENTIONAL GOLD: Ownership Options

  • Physical gold
    • Held at home: not insurable and therefore not suitable for significant amounts
    • Professionally vaulted: incurs ongoing costs which result in a negative yield
  • Exchange Traded Funds (e.g. GLD)
    • Exposed to counterparty risk
    • Negative yield (due to the expense ratio)
    • Most accessible way to bet on the price action
  • Shares of mining companies
    • Risky in the best of times
    • In tough times, unions and governments become greedy

CONVENTIONAL GOLD: The Truth About Gold

  • Everyone should hold some gold coins at home
    • Similar to holding physical cash
    • Insurance against unexpected events or expenses
  • However gold does not grow
    • Not a long-term wealth accumulation strategy
    • One does not become rich by merely holding money
      • Gold is money
      • Gold does not go up; it is the dollar that goes down