There are a number of great ways to hedge one’s portfolio. Among them is one method I’ve been very vocal for a long time. Gold has value as a portfolio hedge over the long term. Deciding exactly how to initiate a gold position is a key question many investors have.
In this article, I’m going to discuss one Exchange Traded Fund (ETF) I’d recommend investors check out right now to gain said gold exposure
The Sprott Physical Gold Trust ETF (NYSE:PHYS) gives investors exposure to physical gold bullion, perhaps my favourite means of investing in gold for a few reasons.
First, physical gold tracks the price of gold directly. Other than risk around the price of gold, an investor is able to gain exposure to this store of currency in the “cleanest” way possible. Various idiosyncratic risks tied to mining operations, political influences, futures contracts, etc. are a non-issue for this type of investment.
Furthermore, buying this ETF provides investors with much more liquidity than owning physical bouillon personally as storage costs and transaction fees for buying and selling gold are minimized.
My belief is that having some level of exposure to gold or other similar portfolio hedges makes long-term sense for most investors; this recommended percentage has fluctuated depending on who is asked.
However, I’ve always stood by a hedge of at least 5% at all times, and higher if one is very bearish on the near to medium term.
Invest wisely, my friends.