GOLD VS ETFS: WHICH IS MORE PROFITABLE TO INVEST IN?

Gold remains one of the most appealing assets for protection in times of instability and panic on stock markets. It's durable, in demand and allows you to preserve capital during the crisis.

Gold keeps its price stable, it is not subject to market downturns, and in times of crisis, on the contrary, it only increases in value. Gold can be physically perceived, if you invest your money in bars, gold coins, or jewelry.

But there is an alternative option for investing in gold - gold ETFs. This is an analog of stock market shares, designed to invest directly in physical gold. So which is better: gold or ETFs?

Let's find things out.

5 reasons to invest in physical gold:

• Tangibility: "Gold" ETF funds allow you to actually invest in gold without having to purchase it physically. The shares of such a fund will completely replicate the movements of the market price of gold. BUT! Many people are hesitant about investing in virtual instruments (stocks, cryptocurrency, bonds. Physical gold can be felt, you can keep it with you or put it in a bank safe - then you are sure that it is at hand, and at the right moment you can make transactions with it without any delay. ETF contracts can, of course, be equated to gold. But you won't physically get the metal in your hands. Instead, at the time of exchange, you will receive the equivalent value of your gold savings in fiat money.
• ETF contracts can, of course, be equated to gold. But you won't physically get the metal in your hands. Instead, you will receive the equivalent value of your gold savings in fiat money at the time of exchange.
• Costs: For some investors, buying a virtual instrument is an interesting option because you have to pay VAT when buying physical gold, while buying an ETF only requires paying a commission to the provider. In addition, there is no question of storing the gold: you would have to find a reliable storage facility and rent it, or at least buy a safe for the bars to install it in your home.

But it's not so simple with ETFs, either. It's not uncommon for ETF contracts to cost more than the equivalent of the gold assigned to them. In addition, when investing in an ETF, you'll still have to pay transaction fees, your broker's fees, and cover the fund's expenses. Of course, experienced traders are able to minimize these costs, but for beginners, investing in an ETF can cost a pretty penny.

• Liquidity is another reason why physical gold beats ETFs. Gold fund contracts can be used when playing the stock market. You can sell them and buy them. Not only can you sell gold at any time at a bank, pawn shop, or directly contract with an industry interested in your gold stock if the need arises.

You can use gold as the basis for creating jewelry, invest it for profit in a bank, accumulate it, or give it as a gift. Agree, a gift of a gold bar looks like a much more tangible gift than an ETF contract as a gift.

• Finally, there is the issue of ownership. When you buy a bar or coins, you become the owner of the gold with no exceptions. ETF contracts do not make you the owner of the gold. And their coverage in a time of market collapse or crisis would be questionable.

Even though ETF contracts seem like a more modern, convenient and liquid way to invest in gold, traditional gold purchases are not giving up their positions. It's a more conservative investment option, but it's also more reliable.

It is worth buying ETF contracts if you enjoy playing the stock market and have already acquired considerable trading experience. In this case, your trades can be profitable.

Those who want to diversify their investment portfolio, but who are just beginning their journey as an investor, it is better to choose physical gold - it has less hassle and you can always be psychologically confident in the future, as long as your assets have a gold reserve that you can touch.