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Precious Metal ETF

By Edited Jan 24, 2016 0 0

A ETF, or exchange-traded fund, is very similar to a stock. It is a different kind of investment vehicle that is traded on the stock exchange. A ETF is made up of stocks, bonds, or commodities and are traded at roughly the same price as the total net value of the assets contained. With their low cost, tax efficiency, and similarity to stocks ETFs can be very attractive investments. In this day and age where the dollar's value is dropping and gold and other precious metals seem to always be on the rise a Precious Metal ETF can be an extremely attractive investment.

If you are considering investing in Precious Metal ETFs it is important to research several different options before making a decision. Information on many different ETFs and services can easily be found online. Because of the high inflation being experienced by our dollar, and many other countries currencys, right now a precious metal ETF could give a very high return. However in times where the economy is booming a commodity based ETF such as a Gold ETF may not give very high returns. Precious metal ETF is based on precious metal prices. A gold ETF is considered one of the best precious metal ETFs because it has a average return of roughly seven percent a year.

There are many metals that are considered precious. The two most common are gold and silver, but platinum, titanium, rhodium and many other metals can be considered precious metals. These other metals are usually extremely valuable because of their industrial uses. When you are buying an ETF you are not actually paying for the metal itself. The company does not actually hold any of the gold for you. What you are paying for is a contract to buy or sell the metal. This can be a very risky investment but can also have great payoffs. This type of precious metal investment is much easier than actually buying coins, bars, and bullion. It is much easier to buy and sell quickly. This is why a ETF is usually considered a short term investment. People such as day traders and gold speculators would have the most interest in a ETF. If you are a long term investor then you should consider investing in gold bullion.

A precious metal ETF is also cheaper than bullion as well. ETFs also are far more tax efficient because you do not have to pay taxes every time you sell, however you will still be expected to pay capital gain taxes.



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