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Barry Ritholtz: Gold Miners Are A Trade, Not An Investment
FYI: If you wanted to own gold in the bad old days, there were only a handful of choices: You could take physical delivery (but if you needed any size, you would incur costs for storage and security); you could buy futures contracts, but they also incur steep expenses; or you could buy the gold miners, with their “proven reserves.” Earlier this year, I laid out the reasons I believed the gold miners were no longer a good proxy for the metal itself. The change occurred when the SPDR Gold Shares Trust exchange-traded fund gave professional and amateur investors a fast, cheap and easy way to gain instant exposure to gold. Regards, Ted http://www.bloombergview.com/articles/2015-11-12/gold-miners-are-a-trade-not-an-investment
Why does he not provide performance of GLD ETF itself? Without it, that article could belong to any Stock Group ETF compared to the S&P 500.
News flash. All Sector ETFs are trades when you are buying a basket of stocks. That's the whole point. The S&P 500 ETF was created for TRADING not INVESTING. If it was for the latter, ETF was not needed since there is no compelling reason to "invest" intra-day.
I'm sorry Barry. You are filling quota for Bloomberg. Please publish on your own blog.
Yes and no in my opinion VintageFreak. I think broad range index ETFs like the S&P 500 are definitely investing tools. I would even say more so then a managed large cap fund for many people who are seem tempted to jump to the fund of the month. Heck, see it here all the time.
Specific sector funds like gold minors, a perfect example, are certainly a traders tool. And for the last 8+ years more of a Las Vegas betting tool. Most people will loose with the minors. I think Barry is right-on point.
Sorry, once you have an ETF that is designed to be TRADED all through the day, all bets are off. For all you know Rand and Ron Paul are "investing" in GLD, GDX, GDXJ etfs.
But they're not "designed to be traded all through the day". They are designed as a low cost investment to mimic the returns of a broad based index. I'll agree, the ability to trade a broad based index ETF is trading used by a some. But not the purpose.
True that. However, derivatives were not designed to bring the Financial System down. Once the genie is out of the bottle, you can't put it back. You can't tell people a financial product is for investing and not trading.
Comments
News flash. All Sector ETFs are trades when you are buying a basket of stocks. That's the whole point. The S&P 500 ETF was created for TRADING not INVESTING. If it was for the latter, ETF was not needed since there is no compelling reason to "invest" intra-day.
I'm sorry Barry. You are filling quota for Bloomberg. Please publish on your own blog.
Specific sector funds like gold minors, a perfect example, are certainly a traders tool. And for the last 8+ years more of a Las Vegas betting tool. Most people will loose with the minors. I think Barry is right-on point.