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"Direct gold ownership is rife with risks" Every kind of ownership comes with "risks". It is stupidity not to own gold "directly". Buying a gold ETF is likely
by Beijinger 3y ago
"Direct gold ownership is rife with risks"
Every kind of ownership comes with "risks". It is stupidity not to own gold "directly". Buying a gold ETF is likely a bad idea like having your cryptocurrencies not under personal control.
Precious metals ETF charge a yearly fee. A buddy of mine once developed a financial instrument, where the ETF really owns the metal and does not mimic its spot price but also pays a dividend. (And yes, it was legit and a great idea)
- daymanstep 3y agoWhere does the money come from for the dividend? If company profit or gold price goes down does the dividend become negative?
- Beijinger 3y agoNope. But please understand that I can't elaborate this since I still think it is a nice idea. But I give you a hint: I talked about precious metals, not gold. :-)
- frozenport 3y agoIf you heat it up does it expand in volume?
- pjc50 3y agoPlutonium ETF, where you literally can't hold it?
- JumpCrisscross 3y ago> Where does the money come from for the dividend? They loan it out.
- OJFord 3y agoSince GP won't say, my guess is the idea was to explicitly not target capital growth, but a fixed value ('does not mimic spot price') - so you buy in at spot or with some some spread, and the dividend pays out by selling the underlying as spot goes up, with some buffer for fees and being able to buy a certain amount as it falls. If the dividend were also a function of volume & prices of (filled) ETF orders, it could tolerate up to 100% loss. But that doesn't account for the 'I said precious metals, not gold' hint.