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Helping My Mom Buy Gold Certificates - CIBC Investor's Edge?

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[OP]
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Helping My Mom Buy Gold Certificates - CIBC Investor's Edge?

My mom wants to buy about $10,000 in gold certificates in a TFSA. She's looking at CIBC Investor's Edge and was asking if I know if other banks are better. I have no experience with anything beyond Questrade. She wants to just buy them and let them sit there. I don't think she plans on buying more or investing in anything else through this particular account. She just wants to get the $10k worth of gold certificates and let them sit there until... I guess I give her grandchildren and they need money for college. Anyway, the question is - is there a big difference between CIBC Investor's Edge or whatever the equivalent TD, BMO, RBC, or Scotia investing accounts are? Ideally, she'd open an account that allows her to transfer money directly from her Tangerine account into the investment account rather than having to open a separate chequing account from which to transfer to the investing account. Also, are there significant differences in monthly/quarterly/annual fees? Thanks for your help!
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For comparison, here are the fees RBC charges for gold certificates.

Click on image:

RBC DI fees.png
[OP]
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Dec 27, 2013
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IrwinW wrote: For comparison, here are the fees RBC charges for gold certificates.

Click on image:


RBC DI fees.png
Thank you. That's helpful. Do you know what sort of quarterly/annual fee RBC charges for having certificates just sitting in a TFSA with no other trading?
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OntEdTchr wrote: Thank you. That's helpful. Do you know what sort of quarterly/annual fee RBC charges for having certificates just sitting in a TFSA with no other trading?
I don't know this for sure, but assume that "no safekeeping charges for gold certificates" applies to all accounts.

However, be aware that the balance of all combined accounts must be more than $15,000 to avoid the $25 quarterly maintenance fee.

RBC maint fee.png
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OntEdTchr wrote: Thank you. That's helpful. Do you know what sort of quarterly/annual fee RBC charges for having certificates just sitting in a TFSA with no other trading?
Although there are no fees for holding the gold certificate per se, one important concern is the ability and the cost of transacting the certificate after it gets acquired. There is usually a large bid / ask spread on price and also, usually the bank prevents you to "withdraw" the certificate. Typically, in a day like today when spot price for gold is 1,828.00 USD, the bank will sell it to you maybe at +10% which is 2010.8 USD and in top of that will add another 2.5% or more for paying in Canadian dollars. When you want to sell the gold, they will quote you spot - 10%, and by not allowing you to "withdraw" the certificate you have to accept the price - the holding bank is the only buyer.

For only $10000, you mom better buys 4 American Gold Eagles. From tax perspective, there is absolutely no difference between keeping the certificate in TFSA or keeping 4 coins at home in the jewelry box.
[OP]
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andrew4321 wrote: Although there are no fees for holding the gold certificate per se, one important concern is the ability and the cost of transacting the certificate after it gets acquired. There is usually a large bid / ask spread on price and also, usually the bank prevents you to "withdraw" the certificate. Typically, in a day like today when spot price for gold is 1,828.00 USD, the bank will sell it to you maybe at +10% which is 2010.8 USD and in top of that will add another 2.5% or more for paying in Canadian dollars. When you want to sell the gold, they will quote you spot - 10%, and by not allowing you to "withdraw" the certificate you have to accept the price - the holding bank is the only buyer.

For only $10000, you mom better buys 4 American Gold Eagles. From tax perspective, there is absolutely no difference between keeping the certificate in TFSA or keeping 4 coins at home in the jewelry box.
Would she be better off with something like SPDR Gold Shares (GLD)?
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OntEdTchr wrote: Would she be better off with something like SPDR Gold Shares (GLD)?
From cost perspective, today the answer is definitely yes but, of course, a lot of things can change in coupe of decades. ETFs might not exist by than :) On the other hand, I have no doubt about physical gold. An ancient gold coin still holds value pretty well.
[OP]
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andrew4321 wrote: From cost perspective, today the answer is definitely yes but, of course, a lot of things can change in coupe of decades. ETFs might not exist by than :) On the other hand, I have no doubt about physical gold. An ancient gold coin still holds value pretty well.
I'm guessing that physical gold coins are harder to liquidate than an ETF but I understand your point that there's a lot more historical data to support the long-term value of physical gold over the long-term value of ETFs. Something for her to consider. Thanks!

Any other thoughts are appreciated. Basically, she likes gold and wants to invest a bit in gold but she's open considering the best way to do it. Physical coins vs. Certificates vs. Etf vs. Anything else.

If she were to get a few physical 1oz coins, what's the best source to purchase from?
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OntEdTchr wrote: I'm guessing that physical gold coins are harder to liquidate than an ETF but I understand your point that there's a lot more historical data to support the long-term value of physical gold over the long-term value of ETFs. Something for her to consider. Thanks!

Any other thoughts are appreciated. Basically, she likes gold and wants to invest a bit in gold but she's open considering the best way to do it. Physical coins vs. Certificates vs. Etf vs. Anything else.

If she were to get a few physical 1oz coins, what's the best source to purchase from?
Kitco https://online.kitco.com/buy/3000/1-oz- ... -9167-3000. Also 1 oz Gold Maple Leaf https://online.kitco.com/buy/3110/1-oz- ... -9999-3110
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Aug 3, 2012
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andrew4321 wrote: Do you have any personal experience with canadianpmx? How competitive are they? Looking to sell about one 5 ounces of gold jewelry.
Have some friends who use them to buy gold. No experience with selling to them.
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Just looking at the gold stocks in a broad based large cap index like XIU you're already looking at 10%+ of the portfolio. Just another option. When I look at the long term returns of the metal since 1900, I see nothing to get excited about.
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OntEdTchr wrote: I'm guessing that physical gold coins are harder to liquidate than an ETF but I understand your point that there's a lot more historical data to support the long-term value of physical gold over the long-term value of ETFs. Something for her to consider. Thanks!

Any other thoughts are appreciated. Basically, she likes gold and wants to invest a bit in gold but she's open considering the best way to do it. Physical coins vs. Certificates vs. Etf vs. Anything else.

If she were to get a few physical 1oz coins, what's the best source to purchase from?
https://www.mint.ca/store/mint/customer ... r-10900014

Here is the list.
I have positive experience with this one.

https://silvergoldbull.ca/
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Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
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I have holdings in MNT.to in my TFSA and RRSP, as well as some GLD.

MNT.TO is an ETR and as far as I know, acts like a gold certificate in that it's redeemable for gold held by the Mint. Since it's from the RCM, this seems to be the most secure option for me.

Not sure of pros vs cons of gold certificates (didn't know about these), but liquidity is pretty good and it's super convenient to trade. The NAV deviates from its share price a bit, and it's usually not correlated well with the gold price (ie. The gold price could be up while MNT is down significantly and vice versa), I'm not sure if this is just a delay in response to price. But overall it matches with the general trend and satisfies my needs. Up 15% in my portfolio during the last 2 months or so.
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Why is she fixated on Gold? Looking long-term gold isn't even close to whole market investments when dividends are included.
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[email protected] wrote: I have holdings in MNT.to in my TFSA and RRSP, as well as some GLD.

MNT.TO is an ETR and as far as I know, acts like a gold certificate in that it's redeemable for gold held by the Mint. Since it's from the RCM, this seems to be the most secure option for me.

Not sure of pros vs cons of gold certificates (didn't know about these), but liquidity is pretty good and it's super convenient to trade. The NAV deviates from its share price a bit, and it's usually not correlated well with the gold price (ie. The gold price could be up while MNT is down significantly and vice versa), I'm not sure if this is just a delay in response to price. But overall it matches with the general trend and satisfies my needs. Up 15% in my portfolio during the last 2 months or so.
For physical redemptions, there is a redemption fee of C$100 per redemption request and a fabrication fee of (i) 5% of the Gold Price on the Redemption Date for Gold Maple Leaf coins, (ii) US$15 per fine troy ounce for Kilobars and (iii) US$1.00 per fine troy ounce for the first 10,000 fine troy ounces per redemption request and US$0.25 per fine troy ounce thereafter for London Good Delivery bars.
http://www.reserves.mint.ca/tsx_gold/in ... edemption/
Service Fee Rate
0.35% of the Per ETR Entitlement to Gold per annum (accrued and calculated daily; payable monthly in arrears).

http://www.reserves.mint.ca/media/1509/ ... -sedar.pdf
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Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
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Clacker wrote: Why is she fixated on Gold? Looking long-term gold isn't even close to whole market investments when dividends are included.
I believe people have rights to do whatever they pleased with their money. For all we know past market performance does not guarantee future and may be very abysmal.
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Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
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ukrainiandude wrote: I believe people have rights to do whatever they pleased with their money. For all we know past market performance does not guarantee future and may be very abysmal.
She does, but again, with track record and the clear evidence we have discussed ad nauseum, @Clacker 's question is very valid
Support your local Credit Union!

Sask Pension Plan Upto $7000/yr in Credit Card spending on RRSP contributions
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xgbsSS wrote: She does, but again, with track record and the clear evidence we have discussed ad nauseum, @Clacker 's question is very valid
Past performance doesn’t guarantee future performance. No one knows the future including yourself. And finally for some people your evidence might not be convincing enough and you have to learn to live with it. Cheers.
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Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul

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