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  • Writer's pictureIshfaaq Peerally


I recently made a small investment in Gold $GOLD through the SPDR Gold Shares ETF $GLD . The reason why I chose the ETF over physical gold is fees. When you are investing in gold(usually in forms of futures), you need to pay a storage fee. If instead you invest in an ETF which follows gold, you don't pay for the storage fees. The GLD ETF is worth around one-tenth an once of gold. If gold prices rise by 5% on one day, we should expect the ETF to also rise by around 5%.

Why did I invest in gold? I told you a few weeks ago that Ray Dalio said that it was time to invest in gold because of a paradigm shift. He is comparing the current market and economic conditions with that of the 1937 debt crisis. If there is a big debt crisis coming, the best thing to do in such a situation is to invest in gold. I told you that I was not going to invest in gold directly but instead look at gold miners to invest in by going all the companies in the $GDX ETF . Then why did I buy Gold? It is because it will take me time to look for the right gold miners to invest in. There are dozens of them. I have to study all of them and find the right one. It is the same thing for any industry. When I wanted to invest in upstream oil $OIL companies with operations in the Permian Basin earlier, I looked at over 20 of them, then only invested in Choncho Resources $CXO and Parsley Energy $PE . I don't want to rush things. I want to take my time to find the right investment. But in the meantime, I still want to have exposure to the gold market.

Why I didn't invest in a gold miners ETF such as $GDX ? It is because I don't know much about these companies. There are forty of them in the ETF. I want to look at each one of them individually before making an investment. On one day, I may analyze only one or two companies. It takes a couple of hours to analyze one company.

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