The BullionBuzz eNewsletter – January 5, 2010
“Government ‘help’ to business is just as disastrous as government persecution... the only way a government can be of service to national prosperity is by keeping its hands off.”
Risks of Investing in Precious Metals ETFs
David Ranson of Wainwright Economics recently met with Nick Barisheff. Their discussion turned to methods of investing in physical bullion, and the concerns regarding exchange-traded funds. Wainwright felt the points covered represented important information for their subscribers, and published the discussion in a Q&A format that they have made available to Bullion Buzz subscribers also. The questions: Explain the major differences between ETFs and open-end mutual funds; what is the concern about the precious metals ETFs specifically; what specific disclosures should precious metals ETF investors be concerned about; few investors or brokers read the fine print of a prospectus but, legally, are these points included so that the investor is ultimately responsible; how is this different from an open-end fund; apart from the disclaimers in the GLD prospectus, what specific reasons cause you to doubt that it holds unencumbered physical bullion; what do you think might go wrong in the future with the precious metals ETFs. There is now over $30 billion held in ETFs like GLD and SLV, and many investors and advisors have made erroneous assumptions without actually reading the documents. For those who have invested in exchange-traded funds and believe they are holding physical bullion, this is a must-read article.
Learn from the Rich Man
History will show that 2009 was the year Wall Street’s “too big to fail” institutions got even bigger as they pocketed billions in taxpayers’ money and issued massive bonuses; it was the year the US public was shafted; it was the year the President, coached by Wall Street advisors, never clued in to what was going on. It was a good year for precious metals, however, and investors are wondering if it is time to sell. Russell says NEVER sell your gold, silver or platinum; precious metals are an integral part of your estate and net wealth. The price of gold doesn’t matter; gold represents unencumbered wealth. Consider the rich person who accumulates and holds 10,000 ounces of gold. At one point (today) that gold is worth $12 million. Then gold declines to $700 an ounce during a crushing world deflation.
Read more – and more article synopsis like this: http://www.bmginc.ca/document/645
Or register to receive the BullionBuzz in your inbox each week:www.bmginc.ca/buzz_registration_form/