Precious Metals Etf

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Paper precious metals, or Exchange Traded Funds, are securities and stocks that supposedly have real life backing by the physical metal in question.

A complete list of today’s ETF’s in precious metals can be found here.

I would caution enormous warnings about using these, which I will outline below. Bear these points in mind if you choose to work with these stocks. Holding physical metals in your hand or in your individual retirement account is the only sure-fire way to guarantee that you do truly own your metals, and don’t lose all your money in some sort of scam.

1x Leveraged Precious Metals ETF’s

These include GLD and SLV, the most common, largest, and by far most popular of the ETF bunch. These have no actual leverage, which means every GLD share is suppose to represent 1/10th of an ounce of real gold, while SLV shares are suppose to mirror the actual true price of an ounce of silver. Price variations will still occur due to time lag and normal market activity (I.E. panics and disruptions or market makers).

2x Leveraged Precious Metals ETF’s

The riskier of the bunch, stocks like AGQ (2x silver etf), mimic twice the movement of either gold or silver, which can lead to strange price values over time. In fact, it is not uncommon to see 2x etf’s such as these to be worth LESS than the 1x counterpart. The bigger the risk, the bigger the reward. But it also means much bigger losses.

3x Leveraged Precious Metals ETF’s

Due to the high leverage of these, most 3x etf’s are no longer available. When they were, every broker was required to have a warning that stated that 3x ETF’s were only for short-term trades and were not viable as long term investments. Despite this warning, many lost their shirts so to speak. Many of these exchange traded futures are delisted or de-indexed due to non-viability.

When trading any of these, always exercise caution and remember, there isn’t a formal way to actually redeem your shares for the actual, physical metal. So plan on trading these up until the economic collapse of the world’s financial and banking system.

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