Pros and Cons of Owning Physical Gold and ETF Shares

In this article we will discuss both the pros and cons of having ownership of physical gold as well as shares of an ETF. First lets take a look at the pros for owning physical gold.

Pros for Owning Physical Gold
* If you are planning on holding onto your gold long-term then having physical ownership is the safest option.
* Having physical gold in your portfolio will provide a hedge of protection against the volatility of paper stocks, which will provide a balance for your portfolio.
* Physical gold can be stored outside of a bank facility, which provides a safe haven in case of a future confiscation or banking failure.
* Upon buying gold you have the ability depending upon what gold you purchase to have it be a private transaction. This applies to most gold bullion. Non-reportable gold means you do not have to report it to any agency or person.
* Owning physical gold means it is completely portable.
* is a great way to build up an inheritance.
* is recognized all over the world and is easy to liquidate.
* gold has a great amount of growth potential.
* If the dollar were to lose its purchasing power and or you needed to purchase something you could use your gold to do so. Gold is real money and can be used as currency.
* Gold will always have intrinsic value; it will never be worthless.

Pros to Owning Shares of an ETF
* ETF’s are an easy and suitable way to trade on gold prices.
* ETF’s can be put towards larger accounts.
* You can buy and sell ETF shares quickly just like stocks.
* Owning ETF’s are a great short-term investment.
* You don’t have to store it

Cons to Owning Physical Gold
* You have to physically hold them and store them.
* In order to buy or sell physical gold you have to transport it.
* If you want quality coins and for them to be safe and secure you have to find a trusted and reputable dealer to work with.

Cons to Owning Shares of an ETF
* You cannot trade shares in for physical gold.
* ETF shares are paper stocks so they will not protect you against the volatility of paper stocks if things collapse.
* ETF gold holdings can be vulnerable to excessive leveraging by custodians.
* There is little accountability with ETF shares as they are not audited.
* Assets deplete gradually as parts of the share is sold in order to pay for management and other fees.
* ETF’s require more reporting and have less privacy then owning physical gold.
* You can’t actually see what your physical gold holdings are within your ETF. ETF’s are not as transparent.
* If something were to happen to our financial system there is no benefit to owning an ETF.

About Eric Griffin

Eric Griffin is the President and Co-Founder of Eric has been around the precious metals business since 1995 when his father started a leading nationwide precious metals dealer. While getting a finance degree from Arizona State University he helped his father with operations but decided to go into banking and finance when he graduated in 2002. He soon found his way back to the precious metals industry, and has written commentary, managed precious metals websites and managed clients portfolios for many years before opening GASO. Eric has a strong grasp on economics as well as a deep understanding of the precious metals markets. If you have any comments or questions don’t hesitate to respond to any of his blog post.

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