There are many dangers to buying gold through Electronic Transfer Funds (ETF), don’t be fooled! ETFs carry risks that physical gold simply does not have. This video will outline for you all the benefits of holding physical gold over buying ETFs.
Gold vs ETF – Video Transcription
Investing in gold has never been more popular, but how you buy gold is as important as why you buy gold. If you’re one of the millions of people who are considering buying gold, you should understand why experts agree you should own physical gold and why the current fad of buying paper traded gold ETFs, or electronically traded funds, carries hidden risks many ETF buyers do not recognize. Gold has long been considered a reliable hedge against hyperinflation, deflation, currency devaluations, and even the insolvency of governments because its value is not dependent on the value of any single currency, equity or government. The value of ETFs on the other hand are largely or entirely dependent on a single trustee or company. ETF shares offer buyers the opportunity to benefit from the continuing rise in gold prices just like buying physical gold, but at what risk? The gold ETF that dominates the market does not disclose how much of its assets are held in gold, versus cash or securities. So an investor may not know for sure what he’s actually buying. A leading ETF admits sets gold may not meet London Good Delivery Standards for weight and purity. So an investor cannot be confident of the true value of the gold the ETF holds. It also admits that it has no insurance and provides no guarantees against losses caused by theft, damage, inventory, shrinkage, terrorist attacks, and Acts of God. It also says its liability for any losses is strictly limited. Finally, ETFs are heavily promoted for their liquidity and it’s true they can be bought and sold on major exchanges, but in some very significant ways this promise is an illusion for most ETF investors. With physical gold, all of these concerns go away in that what you buy is real, tangible, safe, secure, and there’s always a buyer should you decide to sell. Physical gold is also an excellent form of portable wealth. Gold coins can be accumulated privately as well as passed down generationally. With physical goal there are no ongoing maintenance costs and no liabilities. Public and private companies go broke, banks fail and real estate, enters foreclosure everyday. Investors can suffer substantial or total losses as a result. ETFs are equally vulnerable to these losses too. Make no mistake, they do not represent the security and safety offered by physical gold. Remember, when you physically own the precious metal, you take possession of the asset, an asset that has strong liquidity while retaining the quality of real value. Simply put, if you want to buy gold, buy physical gold. Don’t believe that paper ETFs shine like gold. They often don’t.
Brad Castillo: 03:12
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