Why Bother With Newmont Mining, When ETFs Are a Better Way to Get Exposure to Gold? (GLD, IAU, NEM)

Greg Newton was President of Metal Bulletin Holdings Corp. in New York from 1988 to 2004. His views about how to get exposure to gold as an asset class in a diversified portfolio are therefore of particular interest. This is what he writes:

If you want gold, buy gold. Not other unquantifiable risks

In a world where it’s possible where a handful of mouse clicks can move an investment portfolio from US large caps to Chinese state-owned companies and back again in a matter of seconds, gold – history’s ancient store of wealth – is an amusing anachronism.

Or a vital hedge against the impending cataclysm. That debate can be visited at a shoutfest near you, and as long-running shows go, it makes Cats look like an overnight burnout.

But since retiring from the daily grind to see if I couldn’t do a better job of managing my money than Merrill Lynch, and having time to monitor a wide range of investment viewpoints, it amazes me that so many apparently knowledgeable advisors still advocate inappropriate proxies for gold.

News flash: If you’ve got to have gold in a portfolio – and I’m not getting into that argument – buy gold. Not the shares of some mining company that may or may not hedge its production, or whose largest mine is about to suffer a major geological incident, or whose management is about to hold one of its regular bonfires of shareholder value.

Thanks to the sordid and intractable bureaucratic process of the US Securities and Exchange Commission, US investors were not the first in the world to be able to make “pure