Do You Own Gold - A Follow Up

A couple of months ago, I spent some time reviewing the prospectus for the iShares Gold Bullion Trust. This is an exchange traded fund (ETF) with the ticker symbol GLD. In my interest of owning exposure to gold and owning it to protect myself from the possibility of a currency problem, GLD was convenient. Then came the popularity of GLD and some other ETF's, followed soon after by various writer's claiming expertise, who were sounding alarms about an environment where misrepresentations or fraud could exist. I could not prove or disprove these claims but I felt I could review the prospectus in the light of these claims and come to a conclusion, will I stay or will I go. Am I a trader or an investor?

Do You Own Gold?

The ownership of precious metals is an important, not-correlated to the stock market, alternate investment category. I say it is an alternate category because we do not see the category included in modern portfolio theory (MPT) allocations. We usually see it as a highly volatile and corrupt business sector and I have historically avoided exposure to it. During 2008 and 2009 I used SPDR Gold Bullion Trust (GLD) until I grew concerned about owners rights and other issues that I could not disprove. I miss it. In the current crisis conditions, gold and silver are taking on importance as a currency hedge and as a store of value. Some might use it as a hedge for inflation. Owning the metals is very desirable in a deflation economy, as a hedge against currency devaluation. Metals do not provide business risk and do not have common stockholders who demand certain behavior from management.