Central Gold-Trust (AMEX:GTU)

at support here for long term hedge

Peter Schiff seems to have a level head, and makes a good case for owning physical gold. I like it as a way to add more diversification to a portfolio. (Schiff recommends about 5-10% of a portfolio should be allocated to "hard assets". My preference is closer to 5%)

The simplified ways of owning physical gold are through funds. There are a lot of open mutual funds, but only 2 closed-end funds I could find (source: cefconnect.com).

The closed-end funds have no dollar (no pun-intended) minimums, vs the open end which is typically $2500+. The trade-off is, there is an open-ended one run by Peter Schiff's firm (EPHAX), which may or may not be an advantage.

My hunch is the NAV performance of the closed-end vs the open-end will be roughly the same since the asset exposure is the same.

The price performance of the closed-end should fare pretty well considering, as mentioned, there are only 2, and no minimums. So the more investors are aware of this, looking to flock to gold, I would think this would be among the top go-to sources.

-Lee

QE (infinity) + Inflation + Price Manipulation + China's recent appetite for Gold + National Debt + State's Debt + Dollar demise + Civil Unrest around the Globe + Alan Greenspan's comments + political impotence = "It's Gold, Jerry...Gold!" Pardon the Seinfeld quote. : )

QE2 will drive gold higher. EU bailout of Ireland will drive gold higher. Fear will drive gold higher.

Fundamentally speaking, gold and silver are two safe investing instruments which have now dissipated all their hypes.

Technically speaking, we have just broken a side-way into the up rally, and if it maintained the break we can have a decent upswing until further notice.

silverminer copy

Gold for people who don't want to have gold

cipostripes     99.94     6/16/2010     Outperform

gold

take a chance

Another gem right under most noses. Pick it!

Candian trust holds gold bullion in Canada.

When the overly optimistic FOMC says that household spending will be "constrained" by sluggish income growth, ongoing job losses, lower household wealth, and tight credit AND Shanghai stocks hit a seven-week low, then you know this bear market rally is finally over!

The 1929-1930 equity rally (coming out of The Great Depression) lasted 147 days and the market was up 46%. It has been the same amount of time since the March, 2009 low and we are up about the same percentage. It’s déjà vu (paramnesia), so prepare for a drop of about the same percentage (85%).

When things turn around it will be a result of the governments around the world having pumped money of all kinds into the system. This will cause a surge in inflation as economies start to tick up. That's why I've been and continue to be bullish on precious metals and the miners of said metals. Really, anything that is sensitive to inflation is a good place to be.

The armageddon nuts and gold bugs always think that gold is the place to be, but in this case that does not mean they are wrong.

You can blame TMFBreakerDave for me adding pitches to so many of my picks.

The feds keep printing money, I'm betting on inflation, therefore...gold to hedge.

The dollar crisis is coming....not now, but it's coming.

It was another CAPS player who first brought my attention to Central Gold-Trust. Looking back, I see it was marcd77.
http://caps.fool.com/Pitch/GLD/1898711/gold-is-going-through-1650-in-.aspx
Many CAPS members may be more familiar with Central Fund of Canada (CEF), which is essentially the same thing but with equal parts gold and silver bullion:
http://caps.fool.com/Pitch/CEF/287640/cef-central-fund-of-canada-is-.aspx
Looking more closely, however, I see this closed-end fund does invest in some gold bullion certificates, even though they comprise a small percentage of overall holdings. CEF, on the other hand, invests solely in physical gold and silver bullion... no paper instruments or proxies in their vault! Those certificates currently represent 3% of GTU's holdings, though...not enough to be a major concern for me. The important thing is that they remain, as is stated in the company's profile, "unencumbered".
Here is a link to the company's net asset value page with current vault contents:
http://www.gold-trust.com/asset_value.htm

I view these two instruments as the best alternatives to holding physical bullion available on the market. GLD,IAU,SLV... these all have their flaws in my opinion which make them less desireable... not the least of which involves questions I have about the solvency of institutions involved... like Barclay's, for example.