Categories: Exchange Traded Funds (ETFs)Gold

ETF Talk: Gold Fund May Spiff up Your Portfolio

Central bank monetary policy-easing measures in the United States and elsewhere around the world are raising concerns about inflation and causing investors to begin taking a shine to gold. One fund that I recommended in my Successful Investing newsletter on June 1 is the SPDR Gold Trust (GLD).

The fund is up more than 7% since I recommended it and I expect GLD to rise further in the weeks and months ahead. You do not need to worry about liquidity when investing in GLD, since it is one of the biggest funds in the world with almost $75 billion in assets.

GLD is intended to offer investors a way to participate in the gold bullion market, without the necessity of taking physical delivery of gold. The launch of the SPDR Gold Shares was aimed at lowering barriers, such as access, custody, and transaction costs, which previously had deterred certain investors from buying gold.

SPDR Gold Shares (GLD) was launched in November 2004 by World Gold Trust Services and State Street to offer investors an exchange-traded fund (ETF) backed by physical gold. Indeed, gold is regarded by many investment professionals as a long-term investment which may stabilize wealth by mitigating the risk of dips in other asset classes.

Gold prices have risen sharply this year, with the spot price hovering just above $1,748 this afternoon. The chart here offers proof of the precious metal’s rise at a quick glance.

As you can see, GLD has pulled back in recent weeks, but that retreat may give you a chance to buy shares in the fund at a discounted price. Clearly, inflationary fears are not subsiding anytime soon as deficit-spending in the United States and many other countries are continuing unabated. With central bankers keeping interest rates low or cutting them further, I like gold as a holding that will retain its value and likely rise as inflationary winds pick up.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful Investing newsletter. As always, I am happy to answer your questions about ETFs, so do not hesitate to email me by clicking here. You just may see your question answered in a future ETF Talk.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/