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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Wyätt Gwyön who wrote (22082)11/21/2004 11:25:49 AM
From: orkrious  Read Replies (2) of 110194
 
i, for one, am planning to deploy some of my bubble profits on gold stocks in GLD.

there is one negative about gld that a writer on minyanville pointed out. etf's normally take their fees out of dividends received, and the typical etf has 20 basis points in fees. since gold doesn't pay dividends, there is no cash from which to deduct gld's fees, which are 40 basis points.

so the administrators of gld will be selling 40 basis points worth of gold each year to cover their expenses. so over time the gold held by the etf will be slightly less than "advertised," and this disparity will grow over time.

however, even if you buy gld with the expectation you will hold it for five years, the 2% you'll pay in fees over that time are less than the 3% spread on a purchase from kitco.
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