The best way to own gold

What's the best way to own gold? That's a rhetorical question - the obvious answer is 'with Glint'. But this column is not just a sales pitch - there are compelling reasons why Glint offers the very best way, the most secure way, to own gold.

People own gold for many reasons. One of the most important is that gold is regarded as a strong defense against currency collapse and/or the breakdown of social order. "We are only three meals away from anarchy" is a quote often attributed to the Russian revolutionary Vladimir Lenin, although there's no evidence he actually said it.

But the sentiment is correct - the line separating civilized behavior and the mob is always paper thin. Gold is the best 'what if?' asset. "What if my paper banknotes become worthless?" "What if the ATMs stop working?" "What if my bank collapses?" In those imaginary scenarios - or worse - people will turn to an asset that has been used as money for centuries - gold. Even governments - who are supposed to have an eye on the future - stash away huge amounts of gold in their central banks. It's not irrational to own gold - gold has no counterparty risk - you don't rely on anyone else to meet their obligations, unlike a bank - which will jettison its obligations without too much trouble, if it goes under.

The ETF fallacy

You have a choice of how to hold your gold. Each method has its own drawback.

Sine the early 2000s owning gold through an Exchange Traded Fund (ETF) has become hugely popular - there are more than 100 such ETFs today. They've become popular because, compared to owning physical gold, they are convenient, have lower storage costs, and are easier to trade. But although you have a gold ETF, you don't actually own physical gold - you own shares in a fund. Instead of avoiding counterparty risk, your ETF delivers that risk. During a liquidity crisis your ETF may not be able to be traded. And management fees, which can reach 1% or more, will eat into the value of your ETF share. You rely on the management of the fund - does it even hold the gold which it claims to have?

Most disturbing is that the gold which you believe you own in an ETF is not allocated to you. Instead it's unallocated, meaning you have a claim on a portion of a pool of gold; you are simply a creditor of the institution managing the fund. If the fund collapses you will probably struggle to take ownership of any gold. . There's no deception involved, but people who buy a gold ETF may wrongly imagine they have gold. What you really own is a piece of paper supposedly entitling you to some unallocated gold.

Physical possession

If you decide that you want to be able to touch your gold, to physically possess it, you will certainly avoid the risks inherent to a gold ETF. But don't go down the jewelry route. The mark-ups on the 'raw' gold price for a gold necklace or other decoration can range from 100% to 900% or higher for designer brands.

If not jewelry then what other physical gold can you own? Bars and coins perhaps. Both will have mark-ups, although mostly lower than those of jewelry. But there are drawbacks. Safe storage will not come cheap, and you will find it difficult to use your gold - liquidity will be challenging. And physical gold is heavy.

The Glint solution

Glint has invented the solution to all the above problems in owning gold. There's no counterparty risk because the gold you hold with Glint is allocated - it physically exists in state-of-the-art vaults in Switzerland. The bars in Switzerland may not have your name etched into them, but they, or fractions of them, are allocated to you. So safety and security are taken care of. Counterparty risk is eliminated.

The cherry on the icing though is the liquidity Glint's gold gives. You can go into any store where a debit Mastercard is welcome and spend your gold. Thanks to Glint's clever engineers, the App and card keep you in immediate touch with how much gold you have, how much gold you have spent, and the value of the gold you own.

Spending gold as money is the perfect solution to worries about fiat money losing purchasing value, as it continuously does thanks to inflation. With Glint who cares about what Lenin may (or may not) have said?

For UK clients: At Glint, we make every effort to demonstrate a balanced conversation between gold, silver, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.

For US clients: Graphic representations of value are for illustrative purposes only. The Glint debt card is issued by Sutton Bank, member FDIC. The sale, purchase and storage of precious metals are offered by Glint and not Sutton Bank. Your investment in precious metals through Glint is

·        Not insured by the FDIC.

·        Not a deposit or other obligation of, or guaranteed by, Sutton Bank.

·        Subject to investment risks, including the possible risk of loss of the principal amount invested.

All investments involve risk, including possible loss of principal. The value of precious metals is affected by many economic factors, including but not limited to the current market price, demand, perceived scarcity, and quality of the precious metal. Precious metals can increase or decrease in value. Past performance is not a guarantee of future results. As such, investing in precious metals may not be suitable for everyone.