If you are a first time investor in precious metals you probably don’t know much about the investment process. You probably have a lot of questions regarding precious metals. Precious metals are a excellent investment opportunity which lets you enjoy continuous profits without taking unnecessary risks. These investments also provide you the advantage of being in full control of a real investment together with long-term marketplace worth.
What Exactly Are Precious Metals?
Precious metals are natural chemical compounds prized because of their rarity, luminous appearance, and financial price.
Most people consider precious metals as silver, gold, platinum, and palladium. These metals have significant worth in the market and fall under the wide umbrella of precious metals.
So is it worth investing in precious metals? The answer is YES!
How To Invest In Precious Metals
Normally, when someone talks about investing in precious metals they talk about the basics. They mostly refer to buying and selling platinum, silver or gold.
There are different forms of buying these physical metals. Most people will purchase gold/ silver coins or gold/silver bars. They then keep these in a safe spot. Mostly a safe deposit box or even at a box at the bank.
The second way to invest your money in precious metals is to buy ETF. This is basically buying a stock that that has ties to the current value of the metal. Basically, the ETF symbolizes a small bit of ownership of the metal. When the metal increases in price so does the ETF.
The Advantages Of Investing In Precious Metals
- It is a commodity. Owning a piece of gold is something that is real and tangible. It is not like a stock where your proof of purchase is probably in cyber space somewhere.
- There is a limited amount. Precious metals cannot be manufactured by humans. This is why it is “precious”. It is hard to find.
- The value is opposite of the United States economy. When the economy is down precious metal prices are up and vice versa. This investment definitely helps during those down times if you are strapped for cash.
The Cons On Investing In Precious Metals
- You cannot get rich off of precious metals. That time has passed a long time ago.
- They are volatile investments. Some years there is a jump in value by 50% and some years it is down 50%.
- You have to really study the market to know what you are doing. This cannot be considered as a safety net investment.
- Listening to apocalyptic talk show hosts can make the precious metal investment very volatile.
So, When Should One Invest?
It is best to diversify your portfolio. If you have a lot of other investments like bonds, cash investments, real estate, stocks then you can look into investing in precious metals. This investment maybe the most volatile of all your investments, but you won’t make anything without risking a bit.
There are many advantages and disadvantages to investing in precious metals. Of course with any investment, you just have to take a leap of faith and see where it takes you. Make sure you have other investments before you take the leap of faith investing in precious metals.