State Street Mines ETF Gold
There are a few downsides to these investments, however. For tax purposes, investors of this ETF are treated as though they own "collectibles," which means that any long-term gains will be taxed at a maximum 28% tax rate rather than the current 15% tax rate that applies to long-term capital gains on the sale of stocks and mutual funds.
Another negative about gold as an asset class, says Ron DeLegge, editor of ETFguide.com, is that it doesn't pay a dividend, which makes it a bad idea for income-oriented investors. "While gold has historically been used as a hedge against inflation, it's not an income-producing asset, like real estate."
"The biggest downside is probably the volatility of the asset class," says Wallace. "Gold is currently trading at around $470 per ounce -- a 17-year high -- so potential investors in either of these funds need to make sure that adding gold to their portfolios is part of a long-term investment plan, not just a bet on the flavor of the month."
Gold and the ETFs that track it may be hitting new highs, but gold devotees have a shinier perspective when it comes to the metal's price. The gold bugs point out that gold still trades well below its 1980 all-time high of $850 an ounce, and considering the nation's inflation prospects, still could rally close to it."The threat of inflation and higher interest rates have made investors revisit the idea of holding financial products linked to tangible assets, like the GLD," says DeLegge. "With the click of a button, ETFs have made it easy to have gold exposure, when in the past it wasn't so easy."
Gold and OldiesState Street Global Advisors may savor this one-year "golden anniversary," but it will be their first celebration in a long time.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV