Gyroscopic Investing

Somebody at The Motley Fool made a scary post about the custodian (HSBC) for GLD:

http://boards.fool.com/warm-fuzzies-30645091.aspx

Norm

I haven't looked at GLD's prospectus in years. But the last time I did it was so convoluted in its legalese that after reading it twice I didn't understand a lot of it. And that brings me to one of my really important rules in investing. If someone can't explain how an investment is supposed to work in plain English in less than 15 minutes then you need to walk away. Maybe things have changed. But it doesn't sound like it.

And of course where gold is concerned physical ownership is best. It largely eliminates counter-party risk. On a side note GLD is damned expensive in its ER.

It's always seemed to me that if you were actually counting on gold to protect you during a serious financial crisis, you gotta have it in bullion form. These ETFs are convenient but who knows how they'll actually do if the inner workings ever get exposed by a serious event. I consider my paper gold holdings to be totally ephemeral and basically good for profiting from price movements and easy rebalancing, but I hold physical bullion for peace of mind.

MangoMan wrote: Someone on that MF thread made an interesting point, which I assume has been discussed here in the past, but how exactly do you know that what you are receiving from Goldmart or whomever is actually what they say it is?

That's how capitalism works.  Trust, but verify. 

MangoMan wrote: Someone on that MF thread made an interesting point, which I assume has been discussed here in the past, but how exactly do you know that what you are receiving from Goldmart or whomever is actually what they say it is?

You could try one of these.

http://gyroscopicinvesting.com/forum/ht ... 073#p30073

Never leave home without your Gold Coin Balance!