What are Precious Metals?
Precious metals are valuable metals such as gold, silver, platinum and palladium, etc. that experience rise and fall in supply and demand as the market fluctuates. They allow investments and offer great returns. The value of all precious metals increase and decrease as per certain economic conditions.
Why Should I Invest in Precious Metals?
All the investment experts and financial advisors suggest investing in precious metals. Precious metals still make a good part of the portfolio of a sensible investor. There are several good reasons to invest in precious metals. Here are the most significant ones:
1. Precious Metals Have an Intrinsic Value
No matter what era, precious metals have always had intrinsic value and historically, were used as currencies. Even with the advent of paper currency, these metals did not lose their value. Precious metals offer stability. Thus, they make a great investment avenue.
2. They Act as Hedge against Inflation
Precious metals, especially gold, act as a hedge against inflation. When the world faces a global financial crisis and the prices of commodities go up, gold retains its value. The good thing is that they do not only retain their value but experience an increase as well.
Looking into the history, we can see how precious metals have always performed well during economic challenges. One cannot rely on paper currency or equities during a financial showdown, say the current COVID-19 crisis.
Investing in precious metals always helps you go through the inflationary periods smoothly. They offer protection against economic uncertainties.
3. They Allow Diversification
If you have already invested in stocks, bonds or real estate etc., it is time to put some money in precious metals. Your investment portfolio should have diversity and precious metals can be a great source of diversification.
Now, diversity is important in order to balance your short-term gains and long-term gains. You never know economic uncertainty hits. So whether it be a national or global financial crisis, you need to have investment means that provide quick gains. And for that, there’s nothing better than precious metals.
4. Precious Metals Investment is the Most Viable Option for Retirement Age
Saving up for your retirement years can be quite daunting. While you make an effort to cut down your spending all your life to put aside enough for retirement, you need to make sure that you are investing in a safe place.
So when you are investing for retirement, precious metals make the best option. Even though they experience a gradual rise in value, they will be doing great as you hit retirement. And if the world is facing an economic crisis at that time, you will definitely get great returns for precious metals that tend to perform exceptionally well in uncertain economic periods.
While there are several potential reasons to invest in precious metals, you should also know how you can invest. Read on!
Different Forms of Precious Metals Investment
The two most common forms of precious metal investments are:
- Physical coins, bars and bullions
- Exchange Traded Funds (ETFs).
It is important to know that each form comes with its own advantages and disadvantages.
It might seem traditional but the best way to get precious metals is in their physical form. Bars, coins and bullions might come with the storage challenge but it is definitely worth it. That’s because you own the metal. You can sell it whenever the need arises.
ETFs offer ease and save you from storage inconvenience but you must know the risk attached with this form of precious metal investment. You do not own a metal, so, cannot get them delivered. You are totally relying on the financial institution.
Where to Buy Precious Metals?
Here comes the most important aspect of precious metals investment. Coming with a high value attached, you need to make sure that you are buying precious metals from a reliable source. There are a number of online brokers that buy and sell precious metals.
As coins, bars and bullions make the best form of investment, you should invest in gold and silver coins and bars that come from reputed companies. Some of them include:
- Pacific Precious Metals
- American Eagle
- American Buffalo
- Canadian Maple Leaf
- Austrian Philharmonics
- South African Krugerrand
- Australian Kangaroo
- English Britannia
So, it is best to look for a reputed and reliable online dealer that deals in these coins. You will get a lower premium and higher value. Whenever you choose a dealer, make sure he is associated with London Bullion Market Association (LBMA). This way, you also get vaults to store your precious metals.
Buying precious metals does justice to your investment portfolio. You can protect yourself against economic uncertainties, inflation and retirement challenges. While investing in precious metals is always a good idea, you need to make sure you pick a trustworthy and competitive dealer.