Can a Gold ETF Replace Physical Gold In My Portfolio?

Exchanged Traded Funds, or ETFs, have become popular in recent years because they make investing in precious metals as easy as buying regular stocks. With an ETF, there is no physical product to store, so investors don’t need to worry about securing a home safe or storage facility. This can translate to a lower cost of ownership for ETFs.

However, for those seeking to protect their wealth and savings from the unraveling dollar, investing in gold through ETFs can have some major disadvantages.

For starters, ETFs compromise your financial privacy. An ETF, like any stock, must be traded through a registered broker-dealer, whose license and “Know Your Customer” policies are regulated by the government. If you’ve ever started even a basic account to trade stocks, you’re already familiar with the huge amount of personal information an authorized broker requires, such as social security number, yearly income, and employment information.

Also, with an ETF, anytime you buy or sell shares, the transaction is automatically reported to the government.

By contrast, purchasing physical gold can be a highly private transaction. When ordering from SchiffGold, the only information we need to know are your name and shipping address. We are not required to report purchases to any government regulatory agency unless there is suspicious activity, like paying with large amounts of cash. For that reason, we do not accept cash payments.

Once you receive the gold, what you do with it is up to you. You are required to report any sales of precious metals to the IRS for capital gains purposes; however, under current law, SchiffGold is not required to report purchases or buybacks for a wide variety of gold and silver products. Call and ask a SchiffGold Specialist for complete details at 1-888-GOLD-160 (465-3160).

Being able to put a physical coin in your pocket is one of the best reasons to invest in gold in the first place. If there is a shock to the financial system like 2008 or worse, you will have in your possession one of the most time-honored means of saving and trading wealth. Gold coins can be used to easily barter in an emergency, because gold is recognized as real money all over the world.

Many gold purchasers take great pleasure in knowing the have the ultimate form of money in their personal, physical possession. It cannot go bankrupt; it cannot default; it cannot be devalued; and there are no questions about inspecting or taking delivery of your investment.

ETFs certainly have their place in the market as instruments for short-term speculation, or for those who value convenience. But when you need a stable, secure, and private asset, nothing beats physical gold.