Have you been thinking about investing in precious metals or checking out some gold/silver futures? If you have, you’re not alone. Gold has been a consistently popular investment over the years (sometimes, it’s even more valuable for its investment qualities than its material uses).
Other metals like silver, copper, platinum, and palladium are also quite popular for similar reasons. Precious metals are a robust inflation hedge and offer plenty of diversity in your investment portfolio.
Check out our brief guide to investing in precious metals below.
Why Choose Precious Metals?
In the market at large, investing in Precious Metals is a popular and common way to diversify a portfolio. There are many reasons to go down this route. Precious metals offer some unique intrinsic value outside of making more money.
As we said before, they can diversify a portfolio, but they also can create more safety due to their ability to act as inflation hedges. Precious metals are also highly sought after in certain industries, driving growth, demand, and price. In addition, some metals are a little bit more liquid than others which makes them viable for quick sales at better prices.
There are also many simple ways to get started. Gold, silver, and platinum are among the most popular. Choosing precious metals to expand your investment strategy can be beneficial but has inherent risks. Staying on top of trends, research, and advisement from your brokers will give you an advantage, ultimately leading you down the path to precious metal commodity investment that works best for you.
Methods of Investing
So how does one go about investing in these precious metals? There are a remarkably large number of ways. Stocks are a popular option. Exchange-traded funds track an index, security, or commodity and are traded on the stock exchange (precious metals, in this case, are commodities). Then there are Futures, where investors arrange to take delivery of a pre-arranged amount of metal at an agreed-upon price at some point in the future. Mining stocks are also an option.
Then there are physical investments, which are your topical bullion, coins, jewelry, and gold/silver/platinum bars. Each has its benefits depending on your investing style, and all will aptly diversify a portfolio.
Everyone has probably heard about the benefits of investing in gold (and we’ve all seen the movies full of gold bars!). It’s one of the most well-known, extremely sought-after metals. Gold is still a popular investment choice, especially in exchange-traded funds, gold jewelry, mining futures, and stocks for gold mines. In addition, the price of gold is one of the most commonly watched indicators when it comes to market sentiment.
Gold is a well-known inflation hedge, and investors like it for its ability to withstand world events that create turmoil. Gold prices also go up when the dollar goes down, or there is fear in the stock market. These make it worthwhile as a safe haven and as a wealth preserver, along with its ability to diversify any portfolio. When combined with investing in other precious physical metals, it can be a very valuable commodity.
The second most famous precious metal is silver. Silver is often used in technology and electronics, so it follows the same movements as tech stocks. Silver is also used in photography, dentistry, and medicine.
When you’re diving into the world of precious metals, silver often makes an appearance at the top of an investment list. Not only is it a beautiful white metal, but it’s also an inflation hedge, but historically wasn’t doing as well as gold—until now. At the moment, silver is growing exponentially and was up over 70% in the last year. This growth, coupled with a very high demand for the metal, is driving its value in the market.
Silver also tends to appreciate quite a bit lately. So now is the best time to get into silver as silver prices are going up stronger than gold in the market today. A good way to invest in silver is through precious metals ETFs fund or a silver future, but physical is also an option.
Silver coins, jewelry, or even a certified 10 oz silver bar are fantastic methods for obtaining physical silver. Just make sure you acquire it from a reputable dealer and have a place to store it safely so the investment can appreciate over time. Silver is one of the more valuable metals, not only because of its investment status, but it also serves as a useful industrial metal. It has numerous industrial applications and is used heavily in solar panels, which keeps demand steady.
Platinum is one of the rarest metals and fairly high in demand, especially in the automotive industry. It is, however, a rare precious metal that is often used as an investment similar to gold. Just like gold and silver, platinum is available in coins, bullion, mining futures, stocks, exchange-traded funds (precious metal ETFs), and occasionally in bars.
Reasons to invest in platinum are many, but some of those same benefits can also be risks if the market turns. But platinum Investments can be a bit volatile and fluctuate, so seeking financial advisor assistance is a good bet before deciding to invest in this particular metal.
Should I Invest In Precious Metals?
While there is no one-size-fits-all answer, here are some questions you should consider:
- Do I have the available funds to invest?
- Can I handle the risks of investing in precious metals?
- How long do I have to wait to realize a return on my investment?
- Would I be better off investing in something else?
- Do I care about generating income or trying to protect the money I already have?
If you have even the slightest hesitation, then it’s probably best that you speak with a financial advisor, wealth management company, or fiduciary to ensure that precious metal investing is the right move for you and your specific situation.
How are you going to invest? When do you plan to buy or sell? What does your plan look like for platinum going forward? Consider all of these and plan before diving into this precious metal investment. Then, you’ll be glad you did.