I'm curious what ways people invest in gold and why. I've never done it, but it's something I've been curious about. Also how safe are digital gold assets in the event of a catastrophic economy crash? For instance, when you have cash in savings at a bank and all the banks start failing, to the point where the government can't insure your funds?
(not financial advice, but interest in market mechanics)
Investing in Gold – What are your strategies?
byu/37GreaterThan4547 ininvesting
Posted by 37GreaterThan4547
1 Comment
I just keep about 10% of port in GLDM as gold holding.
I’m frankly not worried enough about a crash to bother with owning physical gold. GLD is suppose to be backed by physical gold, and it has ~150 billion in AUM. The odds of insolvency seem lower then the odds of somebody breaking into my house and taking my physical gold.
Generally investments should not fail on the same way that banks fail. When you deposit money at a bank, your money becomes the bank’s money, and the bank is allowed to invest it however they see fit. If their investments lose money then they may in theory have trouble paying you back. That’s where the FDIC comes into play.
Investments such as equities and ETFs don’t work that way. When you buy investments through a broker, the broker buys those investments and holds them for you. They are not allowed to use your money for other purposes. The investments may lose value if the market crashes, but even if the brokerage goes insolvent, your investments should be in their own little pile. There is some amount of insurance for investments in event of broker insolvency, but unless the broker was committing fraud it really shouldn’t be a problem. This should work the same way for gold ETFs. It is safe to say that if Fidelity or Vanguard or Schwaab are filing for bankruptcy your investment portfolio is likely to not be doing great though.