Hello again, everyone. I've found this forum so helpful that I've little need to post anything, but I'm curious about which gold coins are they preferred purchase among Permanent Portfolio people?
It seems like a mix of 1 and 1/10 oz. coins would be ideal since ETF share usually trade 1 share per 1/10th troy oz., which would make rebalancing potentially easier. One could also track one's investment by following one of the ETF such as GLD or IAU. One. Of course, more storage space is necessary, but nothing in the realm of ridiculous.
It may seem as though I'm answering my own question, but I would greatly appreciate the wisdom of the Crawling Road forum if any flaw, pitfall, drawback or avoidable regret may exist with this strategy.
Which weight is preferred purchase among PP'ers? ( Gold coins:1/10, 1/4, 1 oz.)?
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Re: Which weight is preferred purchase among PP'ers? ( Gold coins:1/10, 1/4, 1 o
One ounce coins are the most common and therefore have the lowest markups over the price of gold they contain. Smaller coins have much higher markups as they are less available. I'd therefore recommend anyone looking to buy gold bullion focus on getting the 1 oz. coins first. These would be American Eagles, Canadian Maples or Krugerrands which are the most well known and widely minted. You will also be getting more gold for your money.
If you want some smaller coins for emergencies, then some "junk" pre-1965 US silver coins are a good option. However silver does not take the place of gold in the portfolio for inflation purposes.
If you want some smaller coins for emergencies, then some "junk" pre-1965 US silver coins are a good option. However silver does not take the place of gold in the portfolio for inflation purposes.
Re: Which weight is preferred purchase among PP'ers? ( Gold coins:1/10, 1/4, 1 oz.)?
If you are going to buy coins smaller than one ounce seriously consider British sovereigns. British sovereigns are .2354 of an ounce and probably the most minted gold coin in history. If you shop around you can get them for about the same premium you will pay for one ounce coins.
As far as the 1/10 ounce gold coins, I wouldn't mess with those. BIG markup.
As far as the 1/10 ounce gold coins, I wouldn't mess with those. BIG markup.
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Re: Which weight is preferred purchase among PP'ers? ( Gold coins:1/10, 1/4, 1 o
Great advice guys. I guess I was just thinking for rebalancing purposes, since my portfolio is relatively small right now (planning on investing mid-upper 5-digits).
Re: Which weight is preferred purchase among PP'ers? ( Gold coins:1/10, 1/4, 1 oz.)?
IMO, you would be better to build a core bullion position of one ounce coins, and fill out the last 10-20% of your gold holding with a PM ETF. To me, that is a much lower cost approach to your situation than messing around with smaller weight coins.
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Re: Which weight is preferred purchase among PP'ers? ( Gold coins:1/10, 1/4, 1 oz.)?
Agreed. ATM I'm doing the PRPFX/EDV 90/10% until I can invest more into my tax-sheltered space. At that point it will be cost efficient and possible to do the 4x25 approach with ETF's/Index funds (I prefer Index funds over ETFs for simplicity). 5% of gold will be in the form of an ETF at that point.MediumTex wrote: IMO, you would be better to build a core bullion position of one ounce coins, and fill out the last 10-20% of your gold holding with a PM ETF. To me, that is a much lower cost approach to your situation than messing around with smaller weight coins.
Any recommendations on ETF's vs. Indexs?
Re: Which weight is preferred purchase among PP'ers? ( Gold coins:1/10, 1/4, 1 oz.)?
Many ETFs mirror an index. Some, like Vanguard's ETFs, are share classes of their open-ended funds. For instance the VTI ETF and VTSMX fund are identical. The ETF shares are used by Vanguard to increase efficiency of the underlying fund. They even have a patent on the idea.SmallPotatoes wrote:Agreed. ATM I'm doing the PRPFX/EDV 90/10% until I can invest more into my tax-sheltered space. At that point it will be cost efficient and possible to do the 4x25 approach with ETF's/Index funds (I prefer Index funds over ETFs for simplicity). 5% of gold will be in the form of an ETF at that point.MediumTex wrote: IMO, you would be better to build a core bullion position of one ounce coins, and fill out the last 10-20% of your gold holding with a PM ETF. To me, that is a much lower cost approach to your situation than messing around with smaller weight coins.
Any recommendations on ETF's vs. Indexs?
Other companies like, iShares ETFs, replicate the S&P 500, total stock market Russell 3000, or whatever.
The main difference between an ETF and open ended fund version of the index are primarily costs. ETFs are usually a little cheaper, but open ended ETFS have no transaction fees for new deposits or withdrawals. ETFs could theoretically be more tax efficient if you get into a situation where many people are selling. An open ended fund however may have to dump capital gains onto shareholders from redemptions if they get too high.
So there are differences and if I was a taxable investor I may consider the ETFs just to avoid the redemption issues if you can keep the transaction costs down. However if you are not taxable then they are largely the same in how they move in the markets.