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  1. #1

    General advise to buy gold etf

    Hi,

    I have been predominantly buying stocks, etfs.. but now i am researching on gold etfs like GLD, NUGT etc. In general, does gold etf go up when stocks fall ? I am not trying to oversimplify this . Lets say before market opens cnbc reports the dow index looks to be down today. Once the market opens anything can happen but focussing on buying gold etf on the day stock falls down is a good strategy ?


  2. #2
    GLD is the biggest though some gold enthusiasts have raised debates on whether it really has the physical it claims and whether it has loaned out/leveraged its gold (and how much). My favorite is GTU. The premiums are generally lower than GLD, which is a plus. I also have shares of CEF which is 50/50 gold & silver. These two have integrity over their physical metal, IMO. I also own PHYS and looking at PSLV.

  3. #3
    1. Open a Vanguard account. Cheaper trading costs.

    2. Put cash in.

    3. Place an all-or-none, good till canceled, buy limit order to buy IAU or GLD - there's not much difference between the two - some percentage below the current market price. Gold etf prices can be pretty volatile so you may as well pick it up when it trades down some.

  4. #4
    Gold generally, though not always, has an inverse relationship to equities. In other words, when stocks are up, gold is often down. And vice versa.

    A lot of folks playing a precious metals trade like you are referring to, tend to go for other metals because they movement is more dramatic than gold. Palladium, silver, copper, etc. There are ETFs out there that are "precious metals" and "natural resources". Again, these TEND to have an inverse relationship to the stock market, although not always. Gold's ETF ticker symbol is "GLD". Silver's is "SLV". You see these going across the tape throughout the day on the CNBC or Bloomberg ticker.

    Generally, stock bull markets result in natural resources bear markets. And vice versa. The stock bull has been going for quite some time. The worm has to turn at some point. Natural resources could be a very prudent play at this point. Or at least a chunk of your portfolio.

    If you buy anything at the open, you aren't going to benefit from any pre-market futures action: That has already been "baked in" by the time you are able to buy a single share. Rather, you are hoping that news breaks and that the ETF price continues to rise/fall throughout the day.

    If you want to bet on a stock market decline, it is much more efficient just to buy a "Put" ETF, which rises when stocks fall 100% of the time, because the ETF is BETTING on a market fall. These are called "bear" ETFs, or some variation thereof. If you truly believe the future of the market is down in the near term, buy a bear ETF!

    I have traded massively at different times in my life. I traded S&P 100 Options for over a year, sometimes have 30 or more trades in a single day. I also traded a lot of stock options and precious metals about the same. All total I probably lost $150K doing so. I decided that if I wanted to gamble in the future, I'd just become a really good black jack player and go to Vegas. At least the drinks are free if you bet enough.

    In all honesty, much of investing these days has denegrated into online gambling. It's basically the same thing.

  5. #5
    No it doesn't.

    GLD has a 1-year return of 10.46% which is far below what stocks returned. The 3-year return is 1.78% and the 5-year return is NEGATIVE 4.56%. Folks who have been investing in gold have actually been losing money in recent years. Even the 10-year return is a measly 3.42%.

 

 

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