News, by definition, is usually bad. Accidents, genocide, suicides, divorces, scandals, corruption — where on earth would we be without the info.

Granted, media may not present financial news in the darkest light; yet, facts and figures may often be presented to support a particular bias. (If you read enough from certain resources, you might come to believe that everyone is unemployed, uninsured and underpaid.)

The reason for mentioning media bias in today’s post is to discuss the possibility that the U.S. is on the verge of economic collapse. I am not a member of the doom-n-gloom society… but stay with me here. Even if you do not accept the premise that the U.S. dollar’s decline, off-shoring of labor, demographic shifts, rate increases, housing woes and deficits are going to combine to bring about calamity, there’s a reason to address the sky-is-falling crowd.

What’s the reason? Gold. That’s right, gold. It is the most popular recommendation by the "batten-down-the-hatches" folks. And yet, you may have other reasons to own "gold."

The most popular of precious metals is commonly considered a strong hedge against inflation as well as a decline in the U.S. dollar. It’s also the place many run to when they lose faith in any currency worldwide. If the U.S. dollar continues its 7-year slide against many of the world’s currencies, most tend to agree that gold will appreciate.

Even if the U.S. dollar strengthens, even if the U.S. economy surges, some feel that gold is a commodity in demand. Some say that you should own gold because of the huge demand by 40% of the world’s population in China and India, where gold still holds extreme reverence.

So how might you own the metal? BAKUL CHUGAN of the Times News Network served up a list of pros and cons for using the ETFs.

On the plus side, investors can obtain gold at near-market price. Although many complain about tracking error, the streetTRACKS Gold Shares (GLD) and the iShares COMEX Gold Trust (IAU) tend to represent the value of gold pretty well.

You can buy or sell GLD and IAU at a price point of your choice on the trading day/time of your choice. Holding gold in this form does not attract additional wealth taxes such that, the tax liability is based solely on regular long-term and short-term cap gains and losses. It’s easy enough to own in your IRA so that there are no immediate tax consequences. And it’s quite practical, as there are no storage or insurance costs required from your hedge/investment.

Costs may or may not be a negative factor for using IAU or GLD. The expense ratio for the iShares COMEX Gold Trust (IAU) and for the streetTRACKS Gold Shares (GLD) is 0.40% annually.

That said, the costs to own coins, bullion, jewelry is likely to be much higher, when you factor in insurance costs, storage costs, and the commissions/mark-ups charged by jewelers and banks. Mark-ups at banks and at jewelers may be as high as 15% in a sales transaction.    

All sentimentality aside, the most practical way, and probably the least expensive way to get gold in your portfolio is through one of the ETFs discussed: iShares COMEX Gold Trust (IAU) or the streetTRACKS Gold Shares (GLD). While I am not recommending gold at this time, I would use an exchange-traded fund as the vehicle of choice for ownership.

Disclosure Statement:  As a Registered Investment Advisor, Pacific Park Financial, Inc. may hold positions in the ETFs, mutual funds and/or index funds mentioned above.

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