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etf vs gold bullion

Gold Bars & Coins Vs. Gold Exchange Traded Funds (ETF): What is the right investment for me?

When considering investing in a safe way, Gold should be the most reliable and secure investment, but you may ask, what is the best way to do it. Should you invest in Gold bars and coins or an Exchange Traded Fund (ETF)? Both have pros and cons, so let’s dive a bit into each one for you to understand the differences, pros and cons of each.

What is an ETF?

When it comes to investing in Gold, a few options are available to you. Mainly you can purchase Gold bullion, Gold coins, or Gold Exchange-Traded Funds (ETFs). The latter is a security that tracks an index, commodities or a basket of assets like stocks and bonds. ETFs can be bought and sold just like stocks on a stock exchange. There are many different types of ETFs, but the most common type is a stock ETF, which holds shares of stocks from other companies.

 

What Are The Reasons for Investing (or not) in a Gold ETF?

Gold ETFs are a convenient way to invest in Gold because they offer liquidity and diversity.

It is convenient as we are referring to the fact that you don’t have to deal with the hassle of storing and safeguarding physical Gold.

Liquidity is because you can simply buy and sell shares on the stock exchange and hold them in your brokerage account. This makes it easy to enter and exit the market as needed.

Diversity stands for owning a varied portfolio of stocks, where you reduce risk exposure to any company or asset class.

However, there are some potential drawbacks to investing in Gold ETFs since the price of Gold can be more volatile than the price of stocks or other investments. In addition, the value of Gold ETFs may not track the price of physical Gold as closely as you might like.

 

What Are The Pros and Cons of Gold Bars and Coins?

Here is a list of some good and (maybe not so good) reasons why investing in bullion.

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PROS:
  • Gold bars are a physical asset that you can hold in your hands.
  • They are safer and resist the test of time.
  • They offer liquidity, meaning you can sell them at any time.
  • They offer the diversification, which can reduce your risk if you have other investments.
  • They come in various sizes, so you can choose the one that best suits your needs.
 
CONS:
  • Gold bars are not as liquid as other forms of Gold investment, such as ETFs or shares in mining companies.
  • They can be more expensive than other forms of investment.
  • They are not as widely available as other forms of investment, (WHAT MAY MAKE THEM MORE PROFITABLE).

 

 

Which is the Right One to Make my Move?

The ETFs are tied to the stock market, which means they can go up or down in value along with the market. Gold bullion, on the other hand, is a physical asset that always has value. It doesn’t matter what the stock market is doing; the price of Gold will always be determined by its worth.

Another reason to invest in Gold bullion is that it’s a safe investment. Gold has been used as currency and jewellery for thousands of years, so it’s not likely to lose its value anytime soon. In fact, many experts predict that the price of Gold will continue to rise in the years ahead.

To summarize, Gold bullion is a smart choice if you’re looking for a safe and stable investment option. Although if you’re looking for an also safe but liquid investment option in uncertain times, then Gold ETFs may be the better choice for you. Ultimately, it always depends on your individual needs and preferences. Call us at 416-366-4000 or send an email to [email protected], and we can discuss a little more about the options we have available and what may be the one to make your move.

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