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That's a good gold fund, but if you want something that more accurately tracks the price of an ounce of gold, try: QGLDX - Gold Bullion Strategy, IAU - iShares Gold Trust, GLD - SPDR Gold Shares, PHYS - Sprott Physical Gold Trust, or SGOL - Physical Swiss Gold Shares.
@Bobpa: Suggest you look at Central Fund Of Canada (CEF), you get a twofer, gold and silver bullion, and a 15% tax rate. For you information I'm linking the fund's website for a straight foward look at what you getting. The funds is up 45% YTD Regards, Ted http://www.centralfund.com/
Bob, for any one who has decided to invest -- not trade -- AU, I'd recommend they consider purchasing/holding physical AU.
The primary reason I suggest this, is that unlike owning mining stocks, bullion ETFs, or OEFs, buying/holding the physical bullion means that at least part of one's portfolio is private, and beyond the knowledge of any Wall Street custodian, govt bureaucrats, or even one's spouse (unless one chooses to volunteer the information).
Off topic somewhat....I've been considering buying nieces and nephews coins as a gift, American Eagle or Canadian Maple Leaf. Somewhat for investment purposes, but mostly because it's really interesting.
Bob, for any one who has decided to invest -- not trade -- AU, I'd recommend they consider purchasing/holding physical AU.
The primary reason I suggest this, is that unlike owning mining stocks, bullion ETFs, or OEFs, buying/holding the physical bullion means that at least part of one's portfolio is private, and beyond the knowledge of any Wall Street custodian, govt bureaucrats, or even one's spouse (unless one chooses to volunteer the information).
See CNBC: Owning Gold Is One Thing, Storing It Quite Another Whether you hold the gold yourself or have another party hold it, there's always the risk of loss by theft, unless you insure the gold. That creates a paper trail.
The article goes into other problems with physical ownership, but I'm addressing the matter of secrecy. It's relatively easy to keep information secret. It's more difficult to eliminate all the breadcrumbs that could be followed by a sufficiently determined actor.
There's also a tax matter - gold is taxed as a collectible (28%), not a capital asset (0% - 20%). That's true for physical gold and physical gold ETFs, but not for mining stocks or foreign based gold CEFs like CEF. Futures-based ETFs/ETNs get yet a different treatment.
Tax-efficient investing in gold (Journal of Accountancy) gives a solid analysis of the tax implications of various gold-based investments held in various ways: non-sheltered, pre-tax sheltered (e.g. traditional IRA) , post-tax sheltered (e.g. Roth IRA).
Does gold held in Roth beat the collectible tax (28%) ? Derf
Yep - It sure would Derf. Roth IRA withdrawals (including gains) are tax free.
However, it might be harder to hide the gold (held in an IRA) from the government, your spouse, bill collectors, plaintiffs against you in lawsuits, courts, the criminal justice system & foreign agents or armies. Sounds like that's where a lot of the discussion is heading.
Assets in a Roth are all taxed the same (i.e. usually not taxed). Nothing special about collectibles.
I'm not sure what the question means. Contributing to a Roth always beats not contributing to any IRA, regardless of the investment, so long as the distributions are qualified (non-taxed), and the investment makes money. (If your investment loses money, you'd be better off having it in a taxable account where you could take the loss.)
Say you have $1K in income and you're in the 33% bracket. After taxes, you've got $670. The choice between contributing that $670 to a Roth or keeping it in a taxable account is obvious.
In the Roth, all growth is tax free. In the taxable account, the growth will be taxed. Doesn't matter whether it's a collectible (taxed at 28%), a savings bond (taxed at 33%), or a non-dividend-paying stock (taxed at 15%). The Roth saves you the tax, whatever the rate.
(The examples above were chosen because they spin off no income while owned. Savings are greater on investments that spin off income, like dividend paying stocks/funds, treasuries, REITs, etc.)
Unless you expect to be above the 28% bracket when you sell/retire/withdraw, the tax rate on collectibles is just the ordinary tax rate. The easiest thing to do in that case is just to think of the gold as a savings bond. If you expect to be above the 28% bracket, then think of gold as a non-dividend-paying stock that is taxed at 28% (instead of 20%) when sold. Still lower than your ordinary tax rate.
Bought TGLDX long time back. Like I do with almost every fund, I never reinvest distributions. Helps when fund yields 80% one year and makes distribution and stinks up the next year. Now again seems to be yielding 100%...waiting for distribution.
Bought FSAGX last year, after seeing TGLDX tank. Any tax loss I have will be offset by FSAGX sale this year. Some HSGFX shares probably. To cut a long story short, I invest in Gold like I do in anything else. A bird in hand...
We have used both CEF and GLD. We have some client who have purchased coins, bars, etc. But then they have to have some secure way to store. Then there is the issue of what to do when you want to "cash it in". Folks like Glen Beck and other EOTWAWKI crazies all advocate owning physical gold. But if things truly come to that stage, who will cash the coin, bars for you? And in the end, there are paper/electronic trails for almost everything. We used to use gold mining funds, but the volatility is crazy, especially the smaller miners.
I use RYPMX through Scottrade. It seems to track GDX closely. It has no transaction fee to buy and no short-term redemption fee. I can buy it one day and sell it the next without paying a penalty. Its gross expense ratio of 1.27% is relatively low for a gold fund.
Comments
Regards,
Ted
http://www.centralfund.com/
The primary reason I suggest this, is that unlike owning mining stocks, bullion ETFs, or OEFs, buying/holding the physical bullion means that at least part of one's portfolio is private, and beyond the knowledge of any Wall Street custodian, govt bureaucrats, or even one's spouse (unless one chooses to volunteer the information).
Plug the ideas expressed in this post and view the results.
https://www.portfoliovisualizer.com/asset-correlations
Is this a crazy uncle idea?
Whether you hold the gold yourself or have another party hold it, there's always the risk of loss by theft, unless you insure the gold. That creates a paper trail.
The article goes into other problems with physical ownership, but I'm addressing the matter of secrecy. It's relatively easy to keep information secret. It's more difficult to eliminate all the breadcrumbs that could be followed by a sufficiently determined actor.
There's also a tax matter - gold is taxed as a collectible (28%), not a capital asset (0% - 20%). That's true for physical gold and physical gold ETFs, but not for mining stocks or foreign based gold CEFs like CEF. Futures-based ETFs/ETNs get yet a different treatment.
Tax-efficient investing in gold (Journal of Accountancy) gives a solid analysis of the tax implications of various gold-based investments held in various ways: non-sheltered, pre-tax sheltered (e.g. traditional IRA) , post-tax sheltered (e.g. Roth IRA).
Derf
However, it might be harder to hide the gold (held in an IRA) from the government, your spouse, bill collectors, plaintiffs against you in lawsuits, courts, the criminal justice system & foreign agents or armies. Sounds like that's where a lot of the discussion is heading.
I'm not sure what the question means. Contributing to a Roth always beats not contributing to any IRA, regardless of the investment, so long as the distributions are qualified (non-taxed), and the investment makes money. (If your investment loses money, you'd be better off having it in a taxable account where you could take the loss.)
Say you have $1K in income and you're in the 33% bracket. After taxes, you've got $670. The choice between contributing that $670 to a Roth or keeping it in a taxable account is obvious.
In the Roth, all growth is tax free. In the taxable account, the growth will be taxed. Doesn't matter whether it's a collectible (taxed at 28%), a savings bond (taxed at 33%), or a non-dividend-paying stock (taxed at 15%). The Roth saves you the tax, whatever the rate.
(The examples above were chosen because they spin off no income while owned. Savings are greater on investments that spin off income, like dividend paying stocks/funds, treasuries, REITs, etc.)
Unless you expect to be above the 28% bracket when you sell/retire/withdraw, the tax rate on collectibles is just the ordinary tax rate. The easiest thing to do in that case is just to think of the gold as a savings bond. If you expect to be above the 28% bracket, then think of gold as a non-dividend-paying stock that is taxed at 28% (instead of 20%) when sold. Still lower than your ordinary tax rate.
The cited article gives more detailed examples.
Bought FSAGX last year, after seeing TGLDX tank. Any tax loss I have will be offset by FSAGX sale this year. Some HSGFX shares probably. To cut a long story short, I invest in Gold like I do in anything else. A bird in hand...