Gold Mutual Fund

zamunda said: "Hi, just getting started on an IRA and want to try putting my money into gold... what are the best funds? ... considering both cost and performance?"

cwms said: "[QUOTE=zamunda;67332]Hi, just getting started on an IRA and want to try putting my money into gold... what are the best funds? ... considering both cost and performance?[/QUOTE] Go to Morningstar and research."

pranith said: "Well I can say that investing on precious metals like gold is always been in the safe side as compared to other investiments."

ratAphooey said: "the benefit of a mutual fund is that it is managed by a "pro". the disadvantage is it can cost a lot in fees and many of them are mediocre when it comes to returns."

zamunda said: "While looking around... i came across the etfs: iau and gld.... anyone invested in these? looks like the cheaper way to go compared to a mutual fund. What do you think the prospect of gold price is anyway? I kind of like it, especially since the dollar is sucking so badly..."

Harry said: "Please listen to the talking heads on the financial networks right now. While some are holding gold few are buying. As I stated in another thread, the concensus is that the FED will exercize one more small rate cut followed by NO MORE rate cuts. Likely this will chrun into some rise for the dollar and relax the price of gold and other commodities quite a bit. Don't buy gold now...stalk gold. Have money on the side for opportunities. :th_dblthumb2:"

sr106 said: "[QUOTE=pranith;67345]Well I can say that investing on precious metals like gold is always been in the safe side as compared to other investments.[/QUOTE] yes, you are right, its the better investment to do a business also.... i think nowadays its the cost and more affiliated business..."

tomtat1 said: "I have been investing in gold since 1998 using both gold mining mutual funds and IAU. You need to understand the difference between the two. The mining mutual fund buys gold mining stocks. IAU and GLD for that matter buy and hold gold itself. Buying the stocks of mining companies and buying gold itself are two different investments. While the price of Gold has a big influence on the mining companies it is not the only factor. Cost of mining, and new discoveries also play a big part. Also someone mentioned that investing in gold is safe. I totally disagree. Gold is speculation pure and simple. The only reason you buy it is to sell later at a higher price. It produces no income; it has no yield and is therefore a very risky investment. Ask anyone who bought it at $800 an ounce last time it was in vogue how safe it was as they rode it down to under $300. I am totally out of Gold now as I believe it topped at just over 1000. I bought it when the news stories were predicting its end as a viable hedge against inflation. I sold when they were all singing its praises. That is the only way to make money in it. A final Point: The emergence of these ETF’s that hold gold is big reason gold is going up. AS more people buy in they buy gold and store it thus making it rarer and more expensive. When money starts going out, they will need to sell to meet redemptions. This could very likely lead to a quick downward spiral as the gold market is not that big. When everyone heads for the exits there just aren’t going to be many buyers to hold the price up. Believe me, the central banks of the world are not going to step in to save all the poor gold speculators the way they did the banks."

Aligator said: "[QUOTE=pranith;67345]Well I can say that investing on precious metals like gold is always been in the safe side as compared to other investiments.[/QUOTE] You could say that, but you would be wrong for having said so. In 1980 the Dow was at the 900 to 1,000 mark. It is at 13,000 now. Discounting inflation (a foolish move) you would have 13X your money if you had bought the Dow. In 1980 gold was at the 650 - 750 range. Now it is around 950. Discounting inflation (still foolish) you would just now be getting your money back. Safe? No."

hella skinny said: "The metal market having crashed in 1980 doesn't mean that buying into the metal industry is absolute insanity. Nearly all sources of investment have experienced bubbles. I do not believe metals have topped. The best performing metals in this mellenium have been rhodium and platinum, none of the others have come close to the gains they have made. I'd recommend silver over gold. The metal market may ride out a consolidation period for another 6 or 12 months (as it often does after a big correction), so there isn't much of a rush. Now is a decent buying oppurtunity, though. I remember when folks were yelping that gold would not be above $500 before 2010."

ratAphooey said: "Right now I think of basic commodities as being almost as rare as precious metals. With the planets population continuing to rise we are going to run out of many resources."

tomtat1 said: "[QUOTE=hella skinny;68398]The metal market having crashed in 1980 doesn't mean that buying into the metal industry is absolute insanity. Nearly all sources of investment have experienced bubbles. I do not believe metals have topped. The best performing metals in this mellenium have been rhodium and platinum, none of the others have come close to the gains they have made. I'd recommend silver over gold. The metal market may ride out a consolidation period for another 6 or 12 months (as it often does after a big correction), so there isn't much of a rush. Now is a decent buying oppurtunity, though. I remember when folks were yelping that gold would not be above $500 before 2010.[/QUOTE] It doesn’t mean that the metals market is insanity; in fact I have been a long time speculator in metals as I have previously stated. My entire point of the post is that it is very risky and you need to know what you are getting into I stated that I thought it had topped, and explained why. I could be wrong; I often am early selling assets because I feel the risk reward is no longer in my favor. That doesn’t mean that the assets will not continue to go up. But if you are going to buy here you need to have a good argument for why and an exit strategy for latter. Even a lot of gold bulls admit that we are in the 6th or 7th inning of a 9 inning game. I often leave a ball game early because it’s an awful lot easier to get out of the stadium. Also, in rereading the original post I saw that Zamunda was considering gold for an IRA. I would not put gold in an IRA because it is already very tax efficient. As I said earlier it has no income associated with it so there is no tax paid. It basically accumulates tax free until you decide to sell, and is then taxed as a long term Capital gain at 15% right now. If you put it in an IRA the tax treatment changes to regular income (which is usually higher) when you pull it out. I guess there could be an argument for putting it in an IRA if you are constantly trading in and out of it. But I don’t recommend trading metals in an IRA unless you are very good at it."

tomtat1 said: "[QUOTE=ratAphooey;68527]Right now I think of basic commodities as being almost as rare as precious metals. With the planets population continuing to rise we are going to run out of many resources.[/QUOTE] I think you are absolutely right. I think that food is a better bet here than gold. There is a real supply-demand issue due to the emergence of a middle class in the developing nations. I do not think this will abate any time soon. I know that this argument can be made with gold also, but as food gets more expensive it will take away from their ability to buy gold. If you can only afford one food or gold which will it be? Ways to play this trend include companies like ADM (food), MON (seed), POT (fertilizer). Individual Commodities like corn, soybean, or wheat. Or a basket ETF such as DBA (Proshares DB agriculture). I also like Water here. I like the plays ACM or DHR for companies or the ETF’s PHO or GWI. DHR is not a pure water play but is a diversified acquisition company that has been getting into the water purification business through acquisitions. It is among my favorite investments Period. I have held it for a long time and have not been disappointed. If I could only own one stock this would be the one."