| Let's start off with the assumption that you want to | | | | available to individual investors. In fact, it is so |
| own gold. You want to own gold as a hedge against | | | | innovative and such a major advancement that it will |
| inflation. You want to own gold as a hedge against a | | | | dramatically change the way investors look at |
| declining currency, like the U.S. dollar. And you want | | | | investing. |
| to own gold -- well, for the same reason you would | | | | Here are some relevant facts about GLD... |
| make any investment -- because the price is likely to | | | | - The investment objective of the Trust is for the |
| go a lot higher in coming years. | | | | shares to reflect the performance of the price of |
| But how do you own gold? Until this year you had | | | | gold bullion less the expenses of the Trust's |
| two basic choices: You could own the metal or you | | | | operations. The shares are designed for investors |
| could own shares of gold mining companies (for the | | | | who want a cost-effective and convenient way to |
| purpose of this discussion I'm leaving out gold | | | | invest in gold. |
| futures). The disadvantage of owning the metal is | | | | - One unit (share) of GLD represents 1/10 of an |
| that it's not convenient. You have to store it and | | | | ounce of gold. For example, if gold is at $470 an |
| insure it. That's a pain. And the transaction costs can | | | | ounce, the shares will be priced at approximately $47. |
| be high when you go to buy or sell it. | | | | - GLD trades on the New York Stock Exchange. |
| The disadvantage of owning the shares of mining | | | | - It trades at a very small premium or discount to |
| companies is that you own a stock. And you have all | | | | gold at any given time -- usually less than 1%. |
| the risks that you would have in owning any stock. | | | | - Expenses are low -- currently 0.4% |
| Management may make poor decisions. Increased | | | | - GLD is very liquid. There are 66,900,000 shares |
| operating costs could hurt earnings. The price of the | | | | outstanding. Average daily volume is almost two |
| stock could go down while the price of the metal | | | | million shares. Assets are currently valued at |
| goes higher, etc. | | | | $3,155,106,000. And that's after less than one year of |
| There's a third way to own gold. And it may be the | | | | trading. |
| best way. StreetTracks Gold Trust (symbol: GLD), | | | | The StreetTracks Gold Trust has been one of the |
| makes purchasing gold just as easy as buying shares | | | | most successful new financial vehicles ever launched. |
| of Microsoft or Starbucks. It's innovative and it | | | | And for good reason -- GLD is a great way to buy |
| offers a very liquid and cost-effective way to invest | | | | and sell gold. |
| in an important asset that, until now, was not | | | | |