Quote from Daal:
Why physical?Just this month a bank in the most important business street in Brazil(The brazilian times square if you will, usually has plenty of cops walking around) had their safes open and the contents stolen. A couple lost a few millions in jewelry
I don't wear tin foil so I believe my money is pretty safe in GLD/IAU
Sorry, couldn't respond earlier. Yes, there is always some risk associated with physical - I agree. I have some physical in the house, and some in a safebox in a bank. Sometime in future, I will also get one more safe in another bank - not only to hedge against robbery specifically, but just in general to reduce different kinds of possible risks (bank goes down/robbery/natural hazards - flood, earthquake, fire etc. etc.).
I am hyper-sensitive as far as hedging different kinds of life risks are concerned - however improbable they might be. Especially, those kinds of risks, which can knock you off the game of life or can seriously impact your living standard/conditions for a long period to come (a decade or more). Some of the precautions I take might seem downright unnecessary to many people - but to me they are worthwhile. For example, when I am travelling internationally, I don't go for cheapest flight route, rather I go for most reputed airlines - hoping that their planes will be newer on average, pilots better trained and technicians better able, in general.
Anyways, one of the bigger reasons for me to buy physical instead of futures/ETF is that this is a good way for me to take some money out and put it in a vehicle for long term. If I buy an ETF or a future and keep rolling it, many a times, I will be tempted to close the position to free up the capital when I see a better opportunity - which might lead me to miss the huge move in Gold that I expect.
Alongwith the appreciation that I expect, Investing in gold to me is similar to investing in long term interest bearing fixed income, land and house - which you don't sell every year (unless you are a flipper and a professional). In some sense, Gold and my house (which I don't own yet btw), represent a form of life security for me - which will allow me to pay bills, whatever happens in the world, including my broker going bankrupt overnight. If you think about it, however well diversified you might be, but your trading account will not survive a nuclear strike on nyc, because it will cause markets to gap 50% overnight. However, if you live in a smaller city with a house and some gold - it will give you a chance to have a decent life ahead, instead of going to collect food stamps.
Thats the way I look at it.
