How to buy silver and gold on TD Ameritrade. Beginner investing in gold bars, coins, stocks, ETF's, and mutual funds on Etrade.

How to Invest in Gold and Silver on TD Ameritrade

Looking back through human history, gold and silver are perhaps the oldest continually accepted forms of money or storing value. They are commodities that have withstood the tests of time for centuries, while during this same time hundreds of fiat currencies have come and gone.

Adding gold and silver to your portfolio is a great way to add diversification and hedge your portfolio against inflation, and the good news is that there are ways to get this exposure without actually storing physical gold in your home. In this article we will look at the different ways you can buy gold and silver both in your TD Ameritrade account and in real life.

Why Invest in Gold and Silver?

Two of the primary reasons investors add gold and silver to their portfolios is because it is a hedge against the inevitable inflation that governments create in fiat/paper currencies and it generally performs well during global crises, such as the financial crisis of 2008. The supply of gold that is readily available on Earth is limited, and more of it cannot be produced – two qualities that make it a desirable choice to store value in a world full of paper currencies.

Gold and Silver ETFs on TD Ameritrade

The good news is you can buy gold and silver through ETFs, allowing you to avoid the obvious risks (i.e. theft) that would come with storing the physical commodities in your home. The two most popular and liquid ETFs that track the spot prices of gold and silver bullion are SPDR® Gold Shares (GLD) and iShares Silver Trust (SLV) respectively. GLD is the largest of the two with more than $30billion in AUM and an expense ratio of 0.40%, while SLV has $5billion in AUM and a 0.50% expense ratio.

TD Ameritrade Buy Gold

The ETFs hold physical gold and silver to back the shares they issue, however investors should be aware that they cannot actually redeem their shares for the physical commodities unless they are a significant holder (and even then the prospectus allows the ETF manager to satisfy the redemption in cash if they choose). So while the ETFs are a great way to gain exposure to the precious metals and their prices track the spot prices very closely, GLD and SLV shares technically do not give you legal claim to any physical gold or silver. This is why some investors choose to hold physical gold and silver, which we’ll get into later.

Gold and Silver Mutual Funds on TD Ameritrade

In addition to ETFs, TD Ameritrade also offers several mutual funds that provide exposure to both gold and silver as well as the companies that mine the precious metals. One of the largest gold mutual funds they offer is the Fidelity Select Advisor Gold Fund (FGDAX), which has $1billion in AUM and an expense ratio of 1.18%, which is a bit on the higher side. This fund focuses on capital appreciation by investing mostly in companies that are engaged in gold-related activities (i.e. gold-mining), but also invests up to 25% of its assets directly in physical gold and other precious metals.

TD Ameritrade Buy Gold Mutual Fund

You may be wondering whether you should invest in a gold ETF, like GLD, that tracks the spot price of the metal or a mutual fund, like FGDAX, which invests mostly in gold-miners. Generally speaking, the price of gold-mining stocks and gold itself move the same directionally, but miners are more volatile (i.e. they outperform the yellow rock when it goes up but underperform it when it goes down). This is because the mining companies have high fixed costs, which turns it into a leveraged investment relative to the commodity itself.


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