The Brief Guide That Makes It Simple to Invest in Precious Metals
Are you interested in starting to invest in precious metals?
A smart investor has a diverse portfolio to spread around risk. Precious metals hold their value over time, making them an effective hedge against falling prices for stocks and other financial assets.
Check out this brief guide to precious metals investing to get you started.
Types of Precious Metals
There are nine precious metals, of which four are the most actively traded in the commodities markets: silver, gold, platinum, and palladium. What are the benefits of investing in them?
Investing in Gold
Gold investing is the most popular form of precious metals investing. Gold has traded for millennia as a store of value, and in the past was widely accepted as currency.
Gold is valuable because it is a soft and malleable metal that can be shaped into coins and jewelry without breaking. It does not corrode, and as it conducts electricity, it is used in some electronics.
The value of a piece of gold metal or jewelry depends on its purity. Gold purity is measured either in carats or the percentage of gold compared with other metals.
Investing in Silver
Gold has traded upwards of $1,000 per ounce in recent years, and reached an all-time high above $2,000 in August 2020. So, silver investing offers a more affordable alternative for investors.
Silver has many more industrial applications than gold, from electronics to solar panels, touch screens, dentistry, medicine, and photography. That means unlike gold, which mostly trades on sentiment, the silver price also responds to industrial activity. In that way, silver investing offers a way for investors to take a bet on future economic growth.
Investing in Platinum
Less common than investing in gold and silver, platinum investing is somewhat riskier because it is a more volatile market. However, that creates an opportunity for larger returns for investors who buy low and sell high.
Platinum is primarily an industrial metal. Most of the demand comes from the automotive industry, where it is used in catalytic converters. Fine jewelry accounts for the remaining demand. With governments around the world mandating automakers to reduce carbon emissions from their vehicles, demand for platinum, as well as palladium, is set to rise in the future.
Ways to Invest in Precious Metals
There are several ways you can invest in precious metals. Depending on your circumstances, you might choose one of a combination of investment forms:
- Bullion rounds and bars
- Mutual Funds
- Exchange-traded funds (ETFs)
- Mining company stocks
- Options contracts
The advantage of investing in physical precious metals is that you own the hard asset. Choosing a reputable seller like investorcrate.com makes it easy to buy metals online and have them delivered to you.
The advantage of paper investments like stocks and ETFs is that you don’t have to worry about safe storage and insurance for your gold investment.
Start Investing in Precious Metals
Precious metals investing is a time-tested way to diversify your investment portfolio and make a profit over the long term. Make sure to do your research and choose the form of investment that is right for you.
Check out the finance section of the blog for more tips on building your wealth.