How to Invest in Gold?

In this edition of The Motley Fool's "Ask a Fool" series, Motley Fool analysts Jason Moser and Brendan Mathews take a question from a reader who asks, "Realizing gold is a risky and volatile investment, do you still have any recommendations for certificates or funds?"

Investing in gold is quite a controversial subject. On one hand, it tends to be relatively uncorrelated to other assets in your portfolio. Thus, it offers some diversification benefits. But, on the other hand, it hasn't historically produced very good returns. If you want to invest in gold, the best option for most retail investors, according to Brendan, is the iShares Gold Trust ETF (NYSEMKT: IAU  ) because it has the lowest fees. If you're a very large investor, then SPDR Gold Trust ETF (NYSEMKT: GLD  ) could be a better choice, as it's the most liquid gold ETF.

However, at present, none of The Motley Fool's premium services recommend holding gold. We prefer to invest in stocks, which represent a fractional share of a business. Businesses create products, provide services, and generate value for shareholders, customers, employees, etc. Gold, meanwhile, just sits around incurring storage costs. So by far our preferred investments are stocks.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 07, 2015, at 9:56 PM, dynaruzacaj wrote:

    Anything less than taking full, physical ownership and you don't really own the Gold. If you ever buy it, make sure it is in YOUR possession. Nobody else's. Get a safe and store it in a safe spot if you have less than 25k. If you have more, store it in a bank box that has insurance. I usually buy mine from Gramercy Gold since it's below market price and I've been working with them for years, but any solid buyer will do. But as always - make sure you have it IN YOUR POSSESSION.

    Why? Just ask Germany. America owes them 500 tons and all they got back was 5 tons. The other 495 tons is GONE. No trace whatsoever. And the government has refused to allow audits or inspections of any kind on it's Gold holdings. The only reason why anyone would do that is if they don't have it to begin with.

    So what does Germany get instead? A big I.O.U. and a 'promise' that we will get their Gold back to them someday. LOL, yeah right.

  • Report this Comment On February 11, 2015, at 10:32 AM, Sbrask wrote:


    Hi, you seem to know a lot about gold investments. Do you know where I can start investing in gold? Already found a few good sites like or but I'm still not sure where I can actually trade my savings for gold. Thanks! Sam

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Brendan Mathews

A Fool since 2005, Brendan is a research analyst on The Motley Fool's Stock Advisor newsletter. He enjoys scouring financial statements, pontificating on competitive advantage, and any outdoor activity.

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9/1/2015 4:00 PM
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