A Few Options to Invest in Gold

if you are interested in having the bullion in your portfolio.

ETFs

This is probably the easiest way to invest in precious metals, gold and silver. There areĀ  some several precious metal ETFs available as I discussed in my previous post. Among them, two are very popular: SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) and you can buy them from any discount brokers with commissions from $0 (Zecco) to $7 (Scottrade).

Mutual Funds

Another way to invest without actually owning the metals is mutual funds, which is how I invest in gold. The fund I use is Tocqueville Gold Fund (TGLDX), but there are plenty of choices in the mutual fund arena. However, since mutual funds are required by law to invest a certain amount of assets in equities, gold or silver mutual funds are, in fact, investing in mining companies, not the metal itself. To find the fund specializing in precious metals, you can use Morningstar Mutual Fund Screener. A total of 61 funds were returned, including TGLDX and Vanguard Precious Metals and Mining Fund (VGPMX). Remember that there are funds charge with front load or high initial investment.

Gold Money

What’s interesting about Gold Money is that you can use gold purchased through Gold Money as a payment method. As I mentioned early in my Gold Money review post, the Gold Money account can be used as a checking account, believe it or not, as long as the payee also has a Gold Money account. Through Gold Money, you own the gold your purchased, but don’t actually take possession of the metal. Gold in your account can be cashed out and deposited to your checking account linked to Gold Money.

Gold Coins and Bars

All the three options listed above are good if you don’t want to store any physical gold yourself. If you do, however, want to hold gold coins or bars in your hands, then you need to go to a bullion dealer. There are many dealers out there as well. After comparing a few gold dealers myself, I went with Bullion Direct (GovMint is another choice), where I bought a few gold and silver coins.

Gold Pool Accounts

I know a few places offer such accounts and one of them is the EverBank Metal Select Account. A pool account is a special storage account where a pool of investors collectively own the gold in the account, thus allowing each individual investor own a fraction of an ounce of the metal in the account. A pool account reduces investor’s cost on storage and insurance as these costs are shared by all investors in the account. If you simply want to trade gold or silver, then a pool account is easies way. Kitco, another major online dealer, also has a gold pool account.

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3 Responses to “A Few Options to Invest in Gold”

  1. Dana |  Mar 26, 2009 at 4:49 pm

    And in gold and silver mining companies directly?

  2. Sun |  Mar 26, 2009 at 8:44 pm

    @Dana Of course, individual stocks are always an option. The problem is they are much more volatile than mutual funds/ETFs and require more researches in order to identify a good stock. It’s much easier to invest through a fund.

  3. Nick L |  Mar 30, 2009 at 12:34 pm

    Good information. I put together a post on this subject as well with a map of the precious metal ETFs that you may be interested in