Do You Own Paper Gold

Its an investment nothing more. It was never designed to be converted into real gold, they would have just opened up a bullion shop in that c ASE

I can't quite get my head around spending my hard earned dollars on something that probably doesn't exist and is all based on a promise by someone I don't know/trust.
A definite NO to paper gold/silver from me

With my IRA, I keep about 25% in PMs
Trade in and out of SGOL, PSLV, and CEF
I tried the gold mining stocks but they remain stale and weighted down by various factors. Many have value beyond their price, but how to realize that in profit is beyond my ken

I have to say closer to a derivative than a stock

Paper PMs are ETFs with some simniliarities to stocks, but they are not stocks

Yeah, I'm too anal

Well now, theres actually a difference between ETNs and ETFs and stocks in regards to PMs.

There are tax implications, rebalacing issues, index, options and more which are used in the respective vehicles.

I have been a long time holder of GLD since its inception and also trade around it, buying/selling it short, same with SLV.

NOW, the ETFs that have a big bulk of derivatives are UGL and AGQ which are know as leveraged ETFs. but thee are and intended to be bought and sold short, not to be held.

SLV and GLD are nice investments to own. Golding mining stocks are just terrible.

My brokerage for paper PM investments is Scottrade. The ETFs themselves are PPLT, SGOL, and SIVR. All of these are 100% independently audited and have a 1:1 ratio of metal in their vaults to the number of shares outstanding. This is like the Sprott funds. I am not saying that one can sell shares and get metal for them. All of these trade and settle in US dollars, UNLESS one owns a LOT of shares. Then, depending on how the prospectus is worded, it is sometimes possible to receive metal in exchange for shares. Typically, this requires 100,000 shares or more. Yep, the BIG boys almost always have rules that are different from what the rest of us have.

Still, there are times when a paper PM is better than no PM at all. If we believe in PMs and their ability to significantly rise in price, then having some money in a PM ETF could make sense. This is also true in IRAs, where it can be difficult to own PMs unless it is an ETF or a PM mining company stock.

The bottom line is that paper PMs will share in any PM price rise, so if, for example, the price of silver were to double from $32 to $64 an oz. a silver ETF would reflect that price rise, also by doubling. If so, then it also might be possible to sell those ETF shares for a decent profit and buy physical PMs with those profits. Been there and done that. It worked pretty well too.

One must keep taxes in mind when doing this sort of thing, however. In my case, this is not an issue because almost all of my PM ETFs are in a Roth IRA and I am older than age 59.5, so no tax is due on any money made from PMs in that account.

I'm thinking about selling half of my GLD and buying PPLT because platinum seems to be out performing gold now.