ETF Heavy Metal: Get Into StreetTracks Gold Trust

I know from marketing experience that there are many out there who, for one reason or another, really like putting their money into mutual funds instead of expending the energy to invest in individual stocks (and/or bonds). For the most part, the various rationales all share the common theme of trusting full-time "Money People" to do the work that individuals feel they don't have the time or expertise to do for themselves.

But, I know that there are those contrarian investors who are intent on thinking for themselves. My deduction is that if an investor wishes to be thoughtfully responsible but at once cautiously moderating about risk, then ETFs are the way for him to go. After all, there has to be a reason behind Charles Biderman, president of TrimTabs Investment Research, telling us that "[ETFs] are definitely taking market share away from the more traditional mutual funds."

The sexy ETF that I have in mind is StreetTracks Gold Trust.

I love gold. The price of gold has risen 73% since 1999. It is truly a bedrock asset. It truly "represents the ultimate form of payment in the world", as Alan Greenspan told the US House Banking Committee in 1999. Gold is "real money". It's not a derived abstraction. It's there. And the supply-and-demand dynamic that it engenders renders it eternally bullish. Central banks, which are the largest holders of bullion, have not been selling gold in recent years to the extent that they were before 2001. This puts higher market pressure on each year's supply of mined gold and relentlessly drives up the price of the precious metal of kings.

StreetTracks Gold Trust has already attracted almost $2.5 billion from investors since it was launched on November 18 of 2004. Individuals investing in the fund don't need to purchase futures contracts nor worry about potential delivery of the metal itself. Shares of gold ETFs represent ownership in fractions of ounces of gold bullion held in a vault.