Why PHYS and PSLV?

The reason I chart these two closed ended bullion funds is because I view them as the only appropriate investment vehicles for those seeking gold and silver exposure within retirement portfolios. When I say retirement portfolios I speak of employer sponsored programs such as 401k and defined contribution retirement plans. These type of plans forbid investment in physical gold that you can personally possess, such as bullion bars or coins.

What sets these two apart from other investment vehicles is that they possess only 100% fully allocated bullion. When bullion is allocated, it means that it cannot be used for any other purpose whatsoever. It cannot be held by a third party and cannot be loaned to any entity for any purpose. It must simply sit in a vault. Unallocated bullion can be used by the administrator for various purposes other than what you might intend, such as loan stock. Unallocated bullion can be owed to the administrator and might not even be in his possession. That means it has become someone elses liability. If this someone else defaults, you are screwed owning a paper IOU versus the real thing.

GLD, SLV, and all the other ETFs out there that purport to possess gold and silver have exposure to unallocated gold and silver. The Sprott funds do not. The very best thing is to own gold and silver outright and to possess it yourself. But, PHYS and PSLV are the very best choices when it is impossible to possess the bullion yourself.

Do not kid yourself by believing that an investment in PHYS and PSLV is going to preserve your retirement wealth. It may in fact do this, but whether it does is dependent on your counter-party to a retirement transaction, our own government. Our government stipulates the rules and regulations regarding retirement accounts. They can change the rules at any time as they see fit. If they decide to confiscate your wealth, even invested in gold bullion, they will and there is nothing you can do about it.

The best thing that can be said is that you have taken all the measures you can possibly take to protect yourself and your wealth. You will just have to hope that your government does the right thing. After all, this is the best thing you can hope for with captive wealth. If you are voluntarily contributing to one of these retirement funds, stop now. Pay your taxes on the money and invest in physical gold that you can possess. Then you will be the sole determiner of your future and not a potential victim. I you have money in retirement funds and cannot remove it, such as a 401k, put in the safest place you can and hope for the best, PHYS.

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