2 Reasons Why a Gold ETF Is Great for Your Portfolio, and 1 Reason to Avoid It

Gold exchange-traded funds (ETFs) can either consist of gold mining companies or be backed by physical gold. ETFs backed by gold operate simply: When the price of gold goes up, investors make money. When the price goes down, investors lose money. Like any investment, there are pros and cons to investing in a gold ETF.

Here are two reasons why a gold ETF may be good for your portfolio and one reason you may want to avoid it.

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Source Fool.com