Ask Matt: How can I speculate on gold?

Q: How can I speculate on gold? 

A: Gold's long-standing reputation as a store of value makes it seem attractive during times of uncertainty. Given the contentious election, some investors might think hunkering down in gold is a good move. While investment tools make it easy to invest in gold, there's not much reason for investors to do so.

There are many ways to buy gold. Investors looking to buy the yellow metal can purchase the physical commodity from dealers. The advantage of owning physical gold is that you can get your hands on it if you need it. But there are serious downsides, including storage and security costs, not to mention commissions. Some investors who want the financial security of gold but don't need to have physical access to it can save on storage costs and reduce commissions using exchange-traded products like the SPDR Gold shares, which trade with the symbol GLD. Buying gold this way incurs an annual expense ratio of 0.4%, which is less than what most people will pay buying the physical metal. Investors can also get exposure to gold by investing in the miners. There's a variety of big players, such as Barrick Gold (ABX) and Newmont Mining (NEM). Keep in mind these stocks don't move in complete lockstep with the price of gold.

But while there are many ways to invest in gold, it's not appropriate for most investors and shouldn't be a large percentage of your portfolio. The sell-off of gold in 2013, not to mention volatility in the early 1970s and mid-1980s, are reminders that gold's price is not set in stone and its prospects can be just as nerve-wracking as the stock market.

Paste BN markets reporter Matt Krantz answers a different reader question twice a week. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.