Buy gold or invest in a precious metal managed fund, pros & cons?

rubadub

I have money in some shares and in a managed fund more related to business. I wanted to put money in gold or some other metals. I am lazy about keeping an eye on funds or markets so reckoned a managed fund in gold & other metals would be better for me than just buying gold. Or is it? Are there any pros & cons that may not be so obvious to me? Obviously the managed fund will probably take more of a cut of my earnings % wise, but which are you generally better off with at the end of the day (esp if you are not buying and selling). I expect I will sit on it for about 3-5 years.

bullrunner

better to buy a managed fund...if you buy physical gold then you need to pay for storage on top of the cost of the gold. the managed funds charge a fee...but i think it works out cheaper than the storage cost. Its also a lot easier to close your position if its an exchange traded fund than if its and OTC product such as gold.

hmmm

Gold has an investment and a "doomsday" value i.e. if you believe that the world is going to end in the morning, you might want some gold under your bed. Other than that I can't think of any reasons why a small investor would pay the large spreads to buy and sell physical gold.

The next option is those companies who buy physical gold, store it for you and give you a receipt to say where it is stored. I've never really trusted that option, but I've nothing to say they are not reputable.

The next option is the mutual funds/ETFs etc. I don't buy trade gold personally, but if I was that would be the route I would take. You could also buy shares in gold mining companies, that has its own upsides and downsides. In choosing this option one thing to bear in mind is that you may not physically own any gold to match your "investment", so there is additional risk over physical holding to factor in (wouldn't bother me much, for some it is a big deal).

Before you go buying commodities/metals, I'd recommend Jim Rogers new book. I've no shame in saying that I find gold to be a horrible place to invest because I don't understand the dynamics of the price - silver or copper are easier to understand because they are based more on utility value than as a speculative "alternative currency".

rubadub

Cheers guys, I wasnt planning on buying an actual gold bar or anything, but getting certs like mentioned. I reckon I will research more and probably go with a commodity metal managed fund.

Sonderval

As mentioned, Gold is an excellent hedge for global instability.

I'd also point out that currently gold is in the grip of a bull run. Mooo.

Passport

what does that mean?
"currently gold is in the grip of a bull run"

Digi_Tilmitt

A bull run means a period of rising market price.