doddy,Don't forget the considerable dramas that come with...

doddy,

Don't forget the considerable dramas that come with holding physical; ignore them at your own peril (all the gold bugs seem to ignore the problems with holding physical yet are super vigilant of investing in paper gold to the point of absolute paranoia - that thus far had led nowhere).

As for the problems of physical: Where do you store it?

Kerry Packer had a fair whack of gold stolen from him a few years ago. If you can steel something from Kerry; don't think that any ordinary man is immune.

How do you sell it when you want to? And hey, what do you sell it for (dollars??). But do you just stick it in your pocket and rock up to the nearest gold dealer (who just don't happen to be on every street corner). More than this - consider the zugs' point about push coming to shove with ETF's, imagine what would happen to physical gold. In that situation yeah sure you just walk up to a gold dealer with a pocket full of gold to sell without any worries whatsoever (not!).

Store it at the Perth Mint or bank? Why trust them? And again, you still have to transport the stuff.

Maybe dig a whole in the backyard as many seem to do here. Great: who can you tell so that if something happens to you but you need to access your gold? Or when you die: how do you transfer it to your heirs. Plenty of gold hoarded through the years continues to show up because someone hid it and never accessed it (ie, to them and their family, the investment in physical gold was useless because they were too scared to tell someone where it was).

Oh, and if you do tell someone: how do you feel when you are away from where you've hidden it? How do you relax on an exotic holiday while your gold is sitting somewhere in the hope that no one will find it, or that someone's big lips (intentional or wotherwise won't sink ships).

Again, I say google Kerry Packer and stolen gold bars. If this man can lose gold; accept that your physical can be taken too.

Physical has problems, so your thoughts to diversify are wise I would say.

The gold bugs who prattle on about the problems with ETF's and bang on about physical probably have just never considered the problems with physical (maybe they've never bought and sold much), and probably have never had the joys of easily buying/selling gold via an ETF.