During periods of balance sheet reduction and risking risk premium, stocks as risk assets may experience heightened volatility, especially given the heightened valuations in an extended bull market run.
In anticipation of potential risk-off events and heightened risk premia in an environment where the Federal Reserve is reducing its huge hoard of bonds purchased following the financial downturn, investors may want to consider gold-related investments like VanEck Merk Gold Trust (NYSE Arca: OUNZ) to diversify a traditional stock and bond portfolio.
Related: Choosing the Right Precious Metal ETF for the Right Job
Unlike other gold ETFs, OUNZ is the only ETF that provides its patented, physical gold delivery option, which allows investors to take physical delivery of gold bullion for shares of OUNZ. Each share of OUNZ is like holding a fractional share of physical gold, so investors are able to exchange shares for gold bullion whenever they desire. One share of OUNZ is the equivalent of 0.0099 ounces of gold. Potential gold share converters, though, should be aware that fees for physical delivery are significant.
For more information on the metals market, visit our precious metals category.