Throughout history, civilizations have stored value in precious metals. This almost-universal recognition of value makes gold, silver and other precious metals a great long-term investment. Investing in precious metals provides protection against factors that range from inflation to civil unrest.
Why Invest in Precious Metals?
Precious metals investing is attractive to investors for a number of reasons. The types of precious metals that are most popular include gold, silver, platinum and palladium. Gold has the benefit of being a durable metal that has, historically, kept its appeal. Investors in the precious metals market go back and forth on silver, alternately valuing it as a store of value and a metal with tangible industrial uses. For this reason, its value is more volatile than gold’s. However, because silver is lower in price, it is easier for the beginning investor to get started.
When investments such as bonds, real estate and the stock market go down, people flock to precious metals because these investments tend to increase in value in times of turmoil. If you have invested during times of certainty, you can make a profit by selling some of your investment when prices go up.
Political crises and wars also cause investors to seek the stability of gold. Physical metals are particularly attractive in these situations, since they are valuable items that you can keep in your own possession for greater security.
The safest portfolio is one that is well-diversified. By having investments in precious metals, stocks, bonds, and cash, you can garner profits while protecting yourself from losses.
Identify Your Investment Goals
If you don’t know what goals you are building toward, it is impossible to identify the types of investments that will help you achieve them. Do you want to build wealth? Establish a portfolio that will yield passive earnings? Are you saving funds for events that will happen five years from now, or 30? How much will you need?
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Some investment goals are short-term, while others are medium or long-term goals. Short-term investment vehicles should be safer and less volatile so that you will have your funds when you need them. However, this can lead to lower returns. With a longer investment horizon, you can take more risks in pursuit of higher rewards. The longer span of time means you can ride out downturns.
How you will allocate your assets depends on where your goals fall on the spectrum. Precious metals investing should only be part of your portfolio. You need a mix of investment types to protect yourself from market volatility. Investing in gold and investing in silver can be smart actions for any investor as long as you diversify for a stronger portfolio over all.
How to Invest in Precious Metals
There are a few different ways to begin investing in precious metals.
An Exchange-Traded Fund (ETF) is a security that tracks a commodity or an index. Gold ETFs are one way to invest in gold or silver. Because an ETF is a basket of funds, it can offer some protection from volatility. However, you need to carefully watch to ensure that you don’t lose profits to excessive commissions and trading fees.
Gold or silver stocks allow you to invest in the companies that mine these precious metals. They can often offer good yields, but they come with the risks of market changes. This is not investing in the product directly. This is investing in companies that have made the product their business, rather than investing in the actual product (gold).
The best precious metals to invest in if you want to protect your wealth is to buy gold or silver in physical form. These precious metals are most commonly sold in bars, rounds and coins. These can be purchased at coin shops, Internet auctions and with many precious metal dealers. Scottsdale Bullion and Coin takes pride in offering fair prices for quality precious metal investments. We offer a wide selection of gold and silver coins, as well as options for starting a gold IRA. Most importantly, Scottsdale Bullion and Coin offers professional consultation to help educate you to best manage your important decisions. Talk to us today about which precious metal investments make sense for you.