Replies to post #33022 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

Hi Clive, My post http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57044477 which shows my UBH portfolio includes a Precious Metals component. I think it should be relatively clear that Precious Metals has, at various times, contributed to the stability and performance of the portfolio.

Hope this helps.

Best regards, Tom

[PraveenP]

Hi Clive,

One thing to be aware of with precious metals and other exotic ETFs is that, if you hold them in a taxable account, they aren't necessarily treated the same as stocks and stock-based funds.

For example, in my book, I have a section where I warn to be careful about exotic ETFs, and I mention about the SPDR Gold Shares (GLD). This ETF is actually set up as a grantor trust instead of a mutual fund.

This means that, for tax purposes, it is like you are investing directly in the metal. Any gains will be taxed as either ordinary income or at the collectibles rate (currently 28% - almost double the long term capital gains rate of 15%), depending on whether it is a long term or short term gain.