Precious Metal – Gold

We started to accumulate gold and silver in March 2020 when these assets drops significantly with the market. When we started to build out our position, we planned to use these assets mainly as a hedge against uncertainty and dollar devaluation. It wasn’t until federal reserve started to pump trillions of dollars into the market with new QE that we start to feel scared and shifted some allocation to 2x ETFs to increase our leverage.

For those of you who want to play with the precious metal assets such as gold, there are a few ways. One is that you can directly buy physical gold coin. Gold coins are real physical asset. You can find them in some local stores. An easy and safe choice would be buying directly from US Mint. Another approach is buy gold ETFs (GLD, IAU) or Gold Mutual funds (See some examples below). You can also consider buying gold miner stocks such as Barrick Gold or gold miner ETF. Gold miner stocks and ETFs tend to be more volatile than gold coin itself. Even though they create better return during up cycle, they crush hard during down cycle

For example, here is a comparison of Gold ETF (GLD) vs Gold Miner ETF (GDX). Portfolio 1 is Gold ETF (GLD) and portfolio 2 is Gold Miner ETF (GDX).

To go further, you can leverage up with 2x ETFs such as ProShares Ultra Gold (UGL). Below is a comparison chart of Gold (portfolio 1) and Ultra Gold (portfolio 2)

If you want to mainly buy mutual funds, here are a few fund choices that are free either on Fidelity and Charles Schwab.

Gold Coin
  • Gold Bullion Strategy Investor (QGLDX) – Gold asset
Gold Miners
  • USAA Precious Metals and Minerals Fund Class A (UPMMX)
  • American Century Global Gold Fund Investor Class (BGEIX)
  • Invesco Oppenheimer Gold & Special Minerals Fund Class A (OPGSX)
  • Gabelli Gold AAA (GoldX)

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