Let me ask you a question, if you were asked to invest in gold or if a relative wants to invest in gold and I want you to introduce it, which investment tool would you choose? ? Gold stocks? Gold fund? Or gold futures? ? This time, from the perspective of gold, we will take stock of several common investment tools in the financial market, their investment attributes and transaction attributes.
If you invest in gold, you may be the first to think of physical gold. Physical gold is actually very simple and very traditional, just buy gold bars and take them home for storage. But it is not a financial instrument, so it is outside the scope of our discussion today.
Gold T+D
You must have heard of the other one, called Gold T+D. It can be bought and sold in the domestic banking system, and it is a target for investing in gold.
Gold TD can be understood as a delayed transaction. In fact, if you know a little more about investment tools and have a wider investment horizon, you will not choose gold TD. In fact, it is quite tasteless for investment and trading, and I do not recommend using this investment tool.
futures
Gold futures should also be familiar to everyone. Domestically, in the Shanghai Futures Exchange, gold futures can be traded. Overseas, you can do Comex gold futures, which are international futures.
These two categories should be very easy for everyone to think of. Let’s popularize it here again. I just said where to make gold TD? Do it inside the bank. Where are futures traded? futures company. In China, for example, you can check the ranking of futures companies on the website of the Futures Industry Association, and then open a futures account, just like a stock account. After opening, you can do futures trading. For overseas investment, such as the Comex international gold futures just mentioned, you need to open an account with an overseas broker or securities company before you can invest. I don't know whether there are overseas brokerages in China at present. When I knew about them in 2015, they didn't exist. The IB account opened in Hong Kong at that time was very troublesome.
Contract for difference (CFD contract)
People who have done foreign exchange with this kind of investment tool should know it. It is the CFD contract of gold, commonly known as the gold spot contract.
To briefly explain, overseas gold and foreign exchange transactions are called the OTC market, also known as the over-the-counter market. Just now the futures market is a typical on-exchange market, and the stock market is also an on-exchange market. Everyone trades in a unified exchange. The over-the-counter market has a market without a market, that is, there is no unified trading venue, and it is composed of a market maker system. Also called the MM system.
In fact, a formal, licensed market maker can create CFD contracts for each target by himself. Because CFD contracts are very suitable for retail traders, they can be simply understood as retail investors. If you are talking about overseas futures, you can only trade one lot at least, and the leverage ratio may be relatively low, so you need a relatively large capital threshold, especially when gold is more expensive, you need more funds .
However, the CFD contracts made by market makers have relatively low thresholds and relatively high leverage, which can easily attract retail traders, that is, retail investors.
stock
This should be familiar and cannot be familiar anymore. That's stock. Which domestic gold stocks are relatively highly correlated with gold? For example, 600766 Yuancheng Gold, such as 600547 Shandong Gold, 002155 Hunan Gold, etc. that everyone is more familiar with.
If you want to pay attention to US stocks, there are many companies related to gold, such as ABX Barrick Gold, NEM Newmont Mining, NGD Canadian Gold Mining Company and so on.
ETFs
ETFs should be less common, but they are often heard. Also known as exchange-traded funds, the domestic name is listed open-end index funds. In fact, ETF can not only track the index, but also track most of the assets in the market. When investing and trading, think of it as buying and selling stocks.
ETFs that track gold in China include Nuoan Global Gold and E Fund Gold, but how to track them specifically, whether they hold physical gold or other ETFs, you need to look at their specific holdings.
There is a very famous ETF overseas called GLD. In fact, it holds the physical gold in its positions, so its error in tracking gold is relatively small. If you want to choose an overseas gold-tracking ETF, the first choice is GLD.
options
There is another tool called options. Options here refer to two types. First, its underlying assets are futures, such as an option on gold futures; second, its underlying assets are stocks, such as an option on gold-related stocks.
I have introduced 6 investment tools so far, so I will classify them next. From the perspective of trading, what are the recommended investment tools; from the perspective of investment, what are the recommended tools. Of course, it's still about gold.
suitable for trading
Let's talk about the ones that are suitable for trading. The first is CFD. Of course, it must be an overseas gold CFD contract. What is the reason? First of all, the capital threshold is low, which is beneficial to retail traders, and basically they can do it without investing too much capital. In addition, it is a T+0 mode in the trading mechanism, which can be traded continuously, and there is no daily limit, and there are no other restrictive trading rules.
The flexibility of trading is very good, so it is very suitable for trading, not for investment. Because CFDs are leveraged, this reason alone is enough. In addition, it also has a warehouse interest fee, also called overnight interest. In most cases, the overnight interest is paid by the trader. In the case of long-term holding, the cost of storage interest is relatively high, which is not suitable for long-term holding.
The second one that is suitable for trading is gold futures. If we sort the futures, the overseas Comex gold futures is the first to be recommended. First of all, its market is large and the trading volume is huge, far exceeding the domestic gold futures.
Another aspect is still that there are very few restrictions on the trading rules and mechanisms, which are especially conducive to speculative trading. So what is it that is slightly worse than CFD? The investment threshold is high. Because of its low leverage.
Another option is the domestic futures contract. In terms of domestic trading mechanisms, futures is undoubtedly the most suitable for trading. If compared with gold TD, futures are more suitable. But compared with the international Comex gold futures, it still has certain restrictions on some rules, including the suspension of trading in the middle. Of course, it is much better to have night trading now than before.
The third type is options. Regardless of whether the underlying assets are futures or stocks, gold-type options have good liquidity and are suitable for trading.
suitable for investment
Next, let’s talk about what is suitable for investment. First, let me emphasize the nature of investment. The first one is that you think the price of gold is too low now, and you want to obtain the main income from the price difference through a long-term holding method. This is the investment demand of a type of investor.
The second category is asset allocation. To put it bluntly, where you put your money, which type of assets do you think may have the potential to appreciate in the future? So, what is the investment tool to choose in this way of asset allocation?
The first is stocks. Because on the one hand, there are some mining industries or companies linked to gold, which may have dividends. If you hold such stocks for a long time, because they are linked to gold, once gold starts to rise, these stocks will most likely rise.
On the other hand, it will also be linked to the stock market. If the market is a bull market, these stocks may also rise.
The third benefit is that if you really choose some companies, they will distribute dividends, and with dividend income, you can get some fixed cash flow. Therefore, it is an investment tool that can be held for a long time.
The second is ETFs. It is a tradable fund. Everyone understands the fund. For example, if you hand over the money to the fund manager, he will help you to screen it. Suppose you buy the ETF of GLD for you. As mentioned above, GLD is the physical gold you buy directly. Then it is equivalent to that you are actually tracking the price of gold, but it is not leveraged, and it is also very suitable for long-term holding.
The other is that ETF fund managers choose stocks related to gold, which becomes an ETF. Then if you buy this ETF, it is equivalent to holding dozens or even hundreds of stocks related to gold, which will correspondingly diversify your risk of buying individual stocks.
If the companies in this ETF also pay dividends, you can also get dividends when you invest in this ETF, so it is also a very good investment tool that can be held for a long time.
This separates the transaction and investment attributes of these instruments. When making choices in the future, you must clearly know whether you need trading or investment. It can even be used in conjunction with different financial tools to create an investment portfolio to realize ideas and turn them into trading or investment strategies.
Different markets have different financial tools, the above are just the financial tools I know, I hope it can help you.
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