Your Questions About Invest In Gold Online

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Mark asks…

How do I start investing in gold online? What are the best sites for investing? Thanks!?

financi4 answers:

You need to have a broker, money to invest and patience (for time to work on your side). I don’t believe in paying a broker to guide, manage or refer a stock portfolio or my investments. Why? Because they get paid whether you make money or lose it. If you have an on line brokerage account, i.e. Thinkorswim, ameritrade, sharebuilder and so on, you have to be approved to trade commodities. Or… And this is my preferred method you can just buy into an ETF (exchange traded fund) for gold; ticker symbol GLD.

William asks…

how can i start investing in gold online?

financi4 answers:

I would not be buying gold.

If you want to buy gold, which I think the trade is very crowded, I would look at the gold ETF (NYSE: “GLD”), or if you feel strongly about it buy from a commodities broker in your area and take delivery if you feel you need to hold the physical metal.

Personally, I think gold will fall $200 in a year or two when this story is over. I could be wrong, but I bet I’ll be close, unless some global disaster persists.

Good Luck!

Richard asks…

Hai i want to invest in gold-etf through online; i have demat account and net banking; how to start?

financi4 answers:

Most investors are in the know that GOLD has recently been one of the commodities that has shown rapid levels of price increase. Can you provide some input as to some Market information that can be observed to have HIGH correlation to Gold prices and the underlying rationale of your argument ?
“The wise are instructed by reason; ordinary minds by experience; the stupid, by necessity; and brutes by instinct.” – Cicero, Roman author and politician

Donald asks…

how i can invest in kuwait and us market share and gold etfs online?

how i can invest in kuwait and us market share and gold etfs online?

financi4 answers:

You can invest the money from online website.You can find the website From Google.

Robert asks…

hai i want to invest in gold-etf through online; i have demat account and net banking; how to start?

financi4 answers:

One can invest in gold ETFs just like a equity share. No commodity a/c is needed.

Daniel asks…

what is the best way to invest in gold?

I’m a believer in investing in gold right now in this market. I’m new to investing and do have an online stock trading account. Some people said the way to do it best is to get it in coins so it’s liquid if I ever need to. Which is actually better? Is investing online risker? I know by buying coins I would have to invest in security and/or storage of it somewhere.

financi4 answers:

There are a few possible ways to invest in gold: Gold ETF’s, gold mining stocks, gold bullion, gold coins, and gold futures. There are a few other possibilities like call options on gold futures and ETF’s and swaps on gold that are just not appropriate for new investors so are not discussed below.

There are a bunch of things to consider (but the answer is ETF’s):

Carrying costs: ETF’s will cost you about 1/2% per year in management fees. You could conceivably pack a safety deposit box with gold and pay less than that. Gold mining companies will not cost you any fees directly.

Tracking gold price: ETF’s, futures, and physical gold will track gold exactly. Gold mining companies contain equity risk so they contain risk of how well the company is doing exploring and extracting gold as well as discount rates on future earnings. In terrible inflation, gold and gold ETF’s would almsot certainly outperform gold miners.

Trading Costs: Physical gold trades at a 5% spread or so. ETF’s and big gold mining stocks like Barrick and Newmont trade at much smaller spreads. Futures trade at very small spreads.

Taxes: Earnings on physical gold is taxed at higher rate than ETF’s and gold miining stocks. If you are in the 28% marginal tax bracket or higher physical gold earnings are taxed at twice the rate of ETF’s. Futures are taxed as 60% short-term gains and 40% long term gains so are ideal for trading gold.

Privacy: If you don’t want someone to know about your holdings, bullion or coins in a safety deposit box is hard to beat.

Leverage: You can make an argument that investing in gold mining stocks can give you a leveraged investment in gold, in that the mining company has debt. It’s hard to buy bullion using leverage. You can also use brokerage margin to buy gold ETF’s and mining stocks at 2:1 leverage. The clear winner for leverage is futures which you can trade at 10:1 or so (I’m too lazy to look up margin requirements right now).

Short-term trading: If you are going to trade these short term, all three suck because you get short-term capital gains taxation. Futures contracts count 40% of the gains as long term even if you hold them for 5 minutes.

End of the world: If the governement shuts down leaving us in total anarchy, gold coins and bullion may be more valuable than paper claims on gold. The rate of appreciation on bottled water will be infinitely greater though.

For most real investors – ETF’s are the way to go for direct exposure to gold. Gold stocks are the way to go for a hybrid gold/equity bet. Bullion in a safety deposit box for privacy. Futures contracts for leverage and short-term trading.

Investing online if you are smart about it is not risky. If you buy an ETF at eTrade, a futures contract at Interactive Brokers, or bullion at, I promise you that you will get exactly what you wanted to buy at a price reasonably like the market price (there are other fine places as well).

Edit: @Fred: “The exchange traded funds like GLD or SLV hold mostly derivatives and not real gold ”
I will bet you $10,000 that this is not true (I’ll actually extend this bet to anyone). Have you ever even glanced at the prospectus? GLD and SLV hold almost entirely bullion.

Edit: @Jay “the US once seized all gold (during the Great Depression) ” No, that didn’t really happen now did it? The govt made people sell their gold back to the government at the official gold rate. They prosecuted exactly one person for not doing it and that was unsuccessful. They did it to devalue the currency which was then tied to gold. Guess what? The currency isn’t tied to goid anymore so the govt has no need to do this. The govt doesn’t give a rat’s ass if you own gold.

Gold bugs are absolutely the stupidest class of investors. There may be reasons for owning gold, but most of the idiocy you read on the Internet ain’t it.

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