Friday, February 4, 2011

Positions - A lower risk position in gold via options

There are many opinions on the direction of the price of gold. Some believe gold is in a bubble and will be below $1000 soon. Others think gold is the only true store of value and will be surging past $1500 in the not too distant future. There is of course no sure way to know which of these scenarios will come to pass. There is however, a lot of solid analysis that indicates having a long gold position in a portfolio is a good diversification strategy. (i.e. hopefully if equities and bonds pull back, gold will not)

If you believe in the positive diversification aspects of having gold in a portfolio, there are a few basic alternatives to gain gold exposure in your portfolio such as buying the Gold ETF (GLD) Gold Miners ETF (GDX). However, options on these equities provide another approach to gaining exposure which might minimize the risk in the event of a fall in the price of gold.

Learn more about a low risk option based approach to getting gold exposure in your portfolio at:

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