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Why you’re better buying the real asset

Monday, August 20, 2012

There are several ways to invest in gold, so why do we believe buying the physical product is the only way to stay true to the gold ethos?

Physical, ETF’s, leveraged futures, allocated, unallocated – All forms of investments associated with the gold bullion market, but what do they mean and which will deliver the best balance of performance and security?

If we look to current business and finance news stories, two of the biggest names on the markets in recent months are Apple and Facebook. Apple have been newly heralded as the worlds ‘richest’ company while Facebook have charted a new voyage into the world of stock market floatation, an adventure that has seen their share value spiral more than 50%, from its May 2012 launch price of $38 a share to a new low of just under $19.

To fully understand the mechanics behind each company’s business model – and this is by no means a definitive business analysis, but simply casually observing each company from a layman’s point of view, these two companies fit two very distinct categories…

The rock… Apple Inc. in the main produce physical, touchable tangible products in the form of iPhones, iPads and personal computers – physical goods made from desirable, irresistible contoured metal and glass, utilizing the latest technologies and cutting edge design to produce weighty, solid and functional end products.

The paper… On the flip side, Facebook value their business purely on numbers – How many people have/are/will sign up to their service… A non-physical, fickle entity that is regarded neither as a saleable product nor fixed asset.

Facebook’s business is based entirely on a database, a computer reporting numbers of electronic communications in the ether, it’s not physical, it could disappear, become unavailable, non-existent without a moments notice… and that’s the difference between holding something that exists in the material world and something that exists on a server somewhere in the Arizona desert – Control.

Gold, silver platinum and palladium based electronically traded investments are only as stable as the company behind the platform.

The past four years have clearly demonstrated that banks and financial institutions are not infallible and will always consider themselves before their customers. If your ETF issuer goes bump tomorrow, where do you turn to recover your investment?

Sure your physical kilogram gold bar will cost a fraction of a percentage more to buy, but once you have that metal in hand, you own it, and only you have the right to access, transport or liquidate your investment. You are free from legislation, policy and uncertainty.

Owing physical gold is fundamentally about stability, security and reliability – having the freedom to trade your investment across borders without limitation. You own your gold, you exercise absolute control over your gold.

We believe physically owning gold is the before form of precious metal investment, our thousands of customers agree.