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Gold Guru Says, "I've Shifted My Gold from GLD to This..."By
Thursday, June 14, 2012
"Up until now," gold stock expert John Doody has held what he calls his "investment" gold "mostly in the big gold ETF – GLD."
Now, John has made a major change OUT of the big gold ETF.
GLD is probably the easiest and most popular way for individual investors to "invest" in gold...
It trades on the stock market, just like a stock. So you can buy gold through GLD with one click of your computer mouse. You can sell it just as easily.
The problem is, the big gold ETF "has several warts," as John explains in the latest issue of his Gold Stock Analyst newsletter.
He told his subscribers it's time for an "upgrade" out of GLD. In short, he's shifted all his GLD holdings to CEF (Central Fund of Canada) and PHYS (Sprott Physical Gold Trust).
What are CEF and PHYS? And what's wrong with GLD?
For one, with GLD, you are taxed as if you held gold as a "collectible." So you are taxed at a 28% tax rate for gains on collectibles. Second, it has a relatively high expense ratio, according to John.
John lists other reasons as well – including the scariest – a CNBC report from a London gold vault that GLD might not have the gold it claims to have...
One of John Doody's alternatives to GLD is PHYS. It trades on the New York Stock Exchange. Canadian billionaire (and natural resources expert) Eric Sprott created it.
John Doody points out its important advantages over GLD:
It is a closed-end fund – so it can trade at a premium or a discount to the actual underlying value of the gold it holds. But as I write, it trades very close to its underlying gold value.
John Doody – the man who follows the numbers with gold stocks more closely than anyone we know – has shifted his "investment gold" out of GLD and into other gold funds, like PHYS.
You should consider following his lead...
Good investing,
Steve
Further Reading:
If you'd prefer real, hold-in-your-hand gold, be sure to read Steve's March essay, when he last checked in with rare coin expert Van Simmons. Find out which rare coin is so cheap that Van called it "an absolute joke" here: A Gold Trade with Dramatic Upside That Can't Go to Zero.
And to read more of Eric Sprott's market commentary, click here.
Market NotesANOTHER REASON TO BE BULLISH Investor sentiment is horribly bearish right now.
Last week, the American Association of Individual Investors (AAII) reported that 27% of its members are bullish on stocks for the next six months. About 46% are bearish. That's one of the least bullish and most bearish readings of the year.
Since investor sentiment is often a good contrary indicator, this survey gives us another reason to be bullish for the short term.
We had the same situation at about the same time last year. On June 9, 2011, the AAII reported that 24% of its survey respondents were bullish. And nearly 48% were bearish. That was the highest bearish reading and lowest bullish reading for 2011 up to that date.
In today's chart, you can see what the S&P 500 did over the next month...
This is just one indicator. And you shouldn't use it by itself to make a trading decision. But when lumped together with other indicators like the NYSE Summation Index, it sets up a compelling case for a short-term rally.
– Jeff Clark
P.S. I provide real-time market commentary like this on my Direct Line blog, which is available free to subscribers of the S&A Short Report newsletter. To learn more about a subscription to the S&A Short Report and to get access to the Direct Line, click here.
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