Permanent Portfolio Forum
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https://www.gyroscopicinvesting.com/forum/viewtopic.php?t=10815
EXACTLY what my initial reaction was!Smith1776 wrote: ↑Mon Jun 15, 2020 4:36 pm It's definitely crazy and happening here in Canada for sure. Heck, it's worse than markup, as most dealers are actually just sold out.
I figure a decent stopgap measure is to put the money you have earmarked for physical gold into an ETF until your local dealer has supply. At least that way you get price exposure until supply comes back.
GLD is a bit pricey, GLD is really meant for very short term day and swing traders. For a medium term hold I would look at IAU, as that has good enough liquidity for a medium hold and a much lower ER than GLD.
I like AAAU for long term holds. But I probably wouldn't use it for a holding period that is likely less than a year.Xan wrote: ↑Tue Jun 16, 2020 11:54 amDo you think AAAU is not liquid enough?
GLDM is basically in between AAAU and IAU. It has a slightly lower ER like AAAU, but much lower AUM than IAU. So I would not say at all that GLDM is "substantially identical to GLD". GLD is, like I mentioned, a trading vehicle first and foremost. The high ER is basically paying for high liquidity, and a minuscule spread. For a day trader or swing trader the spread is a larger fee than the ER, so a trader is going to always ignore ER and buy whatever is the most liquid. The longer someone is going to hold an ETF, the less important the spread is and the more important the ER is. So these are key differences between GLD and GLDM, they are both targeted to completely separate groups of people. I personally don't see GLDM as being better than IAU for a holding period of less than a year. For someone that is going to hold for years though, yeah GLDM or AAAU would be a cheaper alternative to IAU all things considered.
Interesting. Thanks for sharing.pmward wrote: ↑Tue Jun 16, 2020 5:07 pmGLDM is basically in between AAAU and IAU. It has a slightly lower ER like AAAU, but much lower AUM than IAU. So I would not say at all that GLDM is "substantially identical to GLD". GLD is, like I mentioned, a trading vehicle first and foremost. The high ER is basically paying for high liquidity, and a minuscule spread. For a day trader or swing trader the spread is a larger fee than the ER, so a trader is going to always ignore ER and buy whatever is the most liquid. The longer someone is going to hold an ETF, the less important the spread is and the more important the ER is. So these are key differences between GLD and GLDM, they are both targeted to completely separate groups of people. I personally don't see GLDM as being better than IAU for a holding period of less than a year. For someone that is going to hold for years though, yeah GLDM or AAAU would be a cheaper alternative to IAU all things considered.
With the volatility in that market, it may be a good opportunity to start one. Wonder if it would be a non-correlated asset class to TSM?
I looked into this. Problem is long term capital gains rate on gold ETF's is 28%. So if my math is correct, to hedge you buy ETF equivalent of one once today and gold goes up $200/oz after one year, you end up paying $56 in cap gains. About the difference between today's bullion markup and "normal" markup. Looks like a wash to me.Smith1776 wrote: ↑Mon Jun 15, 2020 4:36 pm It's definitely crazy and happening here in Canada for sure. Heck, it's worse than markup, as most dealers are actually just sold out.
I figure a decent stopgap measure is to put the money you have earmarked for physical gold into an ETF until your local dealer has supply. At least that way you get price exposure until supply comes back.
The capital gains rate is the lower of 28% or your normal earned income rate.Lonestar wrote: ↑Tue Jul 14, 2020 1:19 pmI looked into this. Problem is long term capital gains rate on gold ETF's is 28%. So if my math is correct, to hedge you buy ETF equivalent of one once today and gold goes up $200/oz after one year, you end up paying $56 in cap gains. About the difference between today's bullion markup and "normal" markup. Looks like a wash to me.Smith1776 wrote: ↑Mon Jun 15, 2020 4:36 pm It's definitely crazy and happening here in Canada for sure. Heck, it's worse than markup, as most dealers are actually just sold out.
I figure a decent stopgap measure is to put the money you have earmarked for physical gold into an ETF until your local dealer has supply. At least that way you get price exposure until supply comes back.
Yes. Furthermore, if you sell the ETF to buy physical, the physical now has the same basis as what you sold the ETF for. Thus, when you sell the physical later, you will have paid the same total taxes as if you had held physical from the beginning (assuming no changes in tax rates, etc.).Xan wrote: ↑Tue Jul 14, 2020 1:22 pmThe capital gains rate is the lower of 28% or your normal earned income rate.Lonestar wrote: ↑Tue Jul 14, 2020 1:19 pmI looked into this. Problem is long term capital gains rate on gold ETF's is 28%. So if my math is correct, to hedge you buy ETF equivalent of one once today and gold goes up $200/oz after one year, you end up paying $56 in cap gains. About the difference between today's bullion markup and "normal" markup. Looks like a wash to me.Smith1776 wrote: ↑Mon Jun 15, 2020 4:36 pm It's definitely crazy and happening here in Canada for sure. Heck, it's worse than markup, as most dealers are actually just sold out.
I figure a decent stopgap measure is to put the money you have earmarked for physical gold into an ETF until your local dealer has supply. At least that way you get price exposure until supply comes back.
Can you point me to a link on that? I can only find documentation of 28% long term cap gains rate, and ordinary income tax rate on short term gains. Seems strange. Are tax rules different on ETF's vs. physical?Xan wrote: ↑Tue Jul 14, 2020 1:22 pmThe capital gains rate is the lower of 28% or your normal earned income rate.Lonestar wrote: ↑Tue Jul 14, 2020 1:19 pmI looked into this. Problem is long term capital gains rate on gold ETF's is 28%. So if my math is correct, to hedge you buy ETF equivalent of one once today and gold goes up $200/oz after one year, you end up paying $56 in cap gains. About the difference between today's bullion markup and "normal" markup. Looks like a wash to me.Smith1776 wrote: ↑Mon Jun 15, 2020 4:36 pm It's definitely crazy and happening here in Canada for sure. Heck, it's worse than markup, as most dealers are actually just sold out.
I figure a decent stopgap measure is to put the money you have earmarked for physical gold into an ETF until your local dealer has supply. At least that way you get price exposure until supply comes back.
There's this:Lonestar wrote: ↑Tue Jul 14, 2020 3:06 pmCan you point me to a link on that? I can only find documentation of 28% long term cap gains rate, and ordinary income tax rate on short term gains. Seems strange. Are tax rules different on ETF's vs. physical?Xan wrote: ↑Tue Jul 14, 2020 1:22 pmThe capital gains rate is the lower of 28% or your normal earned income rate.Lonestar wrote: ↑Tue Jul 14, 2020 1:19 pmI looked into this. Problem is long term capital gains rate on gold ETF's is 28%. So if my math is correct, to hedge you buy ETF equivalent of one once today and gold goes up $200/oz after one year, you end up paying $56 in cap gains. About the difference between today's bullion markup and "normal" markup. Looks like a wash to me.Smith1776 wrote: ↑Mon Jun 15, 2020 4:36 pm It's definitely crazy and happening here in Canada for sure. Heck, it's worse than markup, as most dealers are actually just sold out.
I figure a decent stopgap measure is to put the money you have earmarked for physical gold into an ETF until your local dealer has supply. At least that way you get price exposure until supply comes back.
i believe the 3.80% investment tax surcharge applies too if your get high enough ... i hit it in my real estate sale .Xan wrote: ↑Tue Jul 14, 2020 3:56 pmThere's this:Lonestar wrote: ↑Tue Jul 14, 2020 3:06 pmCan you point me to a link on that? I can only find documentation of 28% long term cap gains rate, and ordinary income tax rate on short term gains. Seems strange. Are tax rules different on ETF's vs. physical?Xan wrote: ↑Tue Jul 14, 2020 1:22 pmThe capital gains rate is the lower of 28% or your normal earned income rate.Lonestar wrote: ↑Tue Jul 14, 2020 1:19 pmI looked into this. Problem is long term capital gains rate on gold ETF's is 28%. So if my math is correct, to hedge you buy ETF equivalent of one once today and gold goes up $200/oz after one year, you end up paying $56 in cap gains. About the difference between today's bullion markup and "normal" markup. Looks like a wash to me.Smith1776 wrote: ↑Mon Jun 15, 2020 4:36 pm It's definitely crazy and happening here in Canada for sure. Heck, it's worse than markup, as most dealers are actually just sold out.
I figure a decent stopgap measure is to put the money you have earmarked for physical gold into an ETF until your local dealer has supply. At least that way you get price exposure until supply comes back.
https://www.irs.gov/taxtopics/tc409
which says "Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate." (emphasis mine).
You can also look at Schedule D whose formulas spell it out pretty clearly, IIRC.
Gold is just another collectible to the IRS. As far as I know, no special rules apply only to gold, other than the ability to put certain gold items in a tax-deferred account.mathjak107 wrote: ↑Wed Jul 15, 2020 6:24 ami believe the 3.80% investment tax surcharge applies too if your get high enough ... i hit it in my real estate sale .Xan wrote: ↑Tue Jul 14, 2020 3:56 pmThere's this:Lonestar wrote: ↑Tue Jul 14, 2020 3:06 pmCan you point me to a link on that? I can only find documentation of 28% long term cap gains rate, and ordinary income tax rate on short term gains. Seems strange. Are tax rules different on ETF's vs. physical?Xan wrote: ↑Tue Jul 14, 2020 1:22 pmThe capital gains rate is the lower of 28% or your normal earned income rate.Lonestar wrote: ↑Tue Jul 14, 2020 1:19 pmI looked into this. Problem is long term capital gains rate on gold ETF's is 28%. So if my math is correct, to hedge you buy ETF equivalent of one once today and gold goes up $200/oz after one year, you end up paying $56 in cap gains. About the difference between today's bullion markup and "normal" markup. Looks like a wash to me.Smith1776 wrote: ↑Mon Jun 15, 2020 4:36 pm It's definitely crazy and happening here in Canada for sure. Heck, it's worse than markup, as most dealers are actually just sold out.
I figure a decent stopgap measure is to put the money you have earmarked for physical gold into an ETF until your local dealer has supply. At least that way you get price exposure until supply comes back.
https://www.irs.gov/taxtopics/tc409
which says "Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate." (emphasis mine).
You can also look at Schedule D whose formulas spell it out pretty clearly, IIRC.
for art it is 28% plus over the limit another 3.80% in investment tax . i would think gold being a collectible too is subject to it also if the income trips it .