Everyone seems to have the same attitude toward gold: three jeers!
Despite some truly frightening conflicts in the Middle East and Ukraine, despite signs of inflation in the United States, and despite promises to “print” from both the Japanese and European central banks, the price of gold has barely managed to climb above $1300 an ounce.
In fact, gold was the worst performing asset class in 2013 — down 24.8 percent. Yet gold is still the best-performing asset of this century!
All of which goes to show you that, when investing, it pays to take the long-term view — unless you are a day-trader, of course. Instead of chasing the best-performing asset, it often makes sense to quietly accumulate a small position in the seemingly least attractive asset.
And if you’re interested in taking that route with gold, there’s a new game in town.
The Merk Gold Trust
The Merk Gold Trust is a new exchange traded fund listed on the New York Stock Exchange under the trading symbol OUNZ. Here’s a brief description of what makes this fund slightly, but significantly, different from other exchange-traded gold funds. But for all the details, you should go to merkgold.com.
There are other ETFs that are based on the price of gold. But none is actually “deliverable” in gold. That’s a pretty sophisticated distinction, and one that you hope will remain meaningless. But at some point in the future, if you actually wanted to hold physical gold — either in the form of bars or bullion coins — this is the only ETF that actually has physical gold in a warehouse, ready for delivery to each and every fund shareholder.
In fact, the distinction between this ETF and others is so significant that on January 7, 2014, Merk Investments LLC was issued patent No. 8,626,641 by the United States Patent and Trademark Office for a “Deliverable commodity investment vehicle.”
Unlike other gold ETFs, which allow physical delivery only to very large holders, every shareholder in the Merk Gold Trust has the right to take delivery of physical gold. And you don’t have to SELL your shares to do it!
That is, you don’t have to make a sale and pay taxes on your profits to convert your shares into physical gold. You can convert to bullion or coins at any time — and can continue to hold them without any tax consequence until you decide to sell your bullion or coins.
There might just be a time when you would rather have gold coins than paper money. In the meantime, this investment allows you to benefit from all the positive aspects of owning a NYSE-listed security: the low cost of purchase, low annual fee of 0.4 percent, and ease of entry and exit simply by selling your shares through your broker. Plus, you have the ability to take possession of the actual gold.
Gold in the Vault
That gold is stored in bonded vaults in London. The fund’s chief investment officer and president, Axel Merk, recently visited the London vaults, holding the bars of gold that are separately allocated to the fund’s account. He sent this message to shareholders:
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This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom