If you're worried about an outbreak of inflation or geopolitical turmoil, you might consider investing in gold.
Gregory Zuckerman of The Wall Street Journal outlined several ways to do that.
"The most straightforward and efficient option is a gold exchange-traded fund [ETF]," Mark Thomas, director of hedge fund research at a division of BMO Financial Group, told Zuckerman.
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"These ETFs have tracked the price of physical gold extremely well since inception and remain one of the cheapest and most scalable ways to build an exposure."
SPDR Gold Trust is the biggest of these funds.
As for buying physical gold itself, that "requires several million dollars to be efficient when considering the cost of secure storage," Thomas said.
Long-term capital gains on both physical gold and ETFs like the SPDR Gold Trust are taxed as collectibles at a 28 percent rate, rather than the 20 percent rate on stocks and bonds.
"In terms of taxes, gold isn't all that glittery," Robert Gordon, president of Twenty-First Securities, told Zuckerman.
Buying options on SPDR Gold Trust or gold futures contracts is a good way around the tax problem, Gordon said.
Shares of gold miners are another possibility, although "these shares have done worse than gold itself in recent years, partly because some gold miners have done a poor job running their businesses," Zuckerman noted.
Gold plunged 28 percent last year, but has rebounded more than 5 percent so far this year. August gold futures traded at $1,265.80 Tuesday morning, reaching a 20-day high Monday.
The Iraqi situation is "particularly unpleasant, . . . and gold is seeing fresh buying and short covering on the back of this," David Govett, head of precious metals at Marex Spectron Group in London, told
Bloomberg.
"While the uncertainty and unrest remains, one certainly doesn't want to be short."
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