Why Should You Invest in Precious Metals?
There are many options available for someone looking to invest their money with metals.com. Whether you are a first-investor with some extra cash that you would like to put toward your future or a seasoned expert looking to diversify your investment portfolio, you have probably heard at some point to think about investing in precious metals. Precious metals are a great investment opportunity that allows you to enjoy steady gains without taking unnecessary risks. These investments also give you the benefit of being in complete control of a physical investment with long-term market value. Our wide selection of silver and gold on metals.com is one of many reasons why we are the best online site for metal investments. These are just a few of the reasons why investing in precious metals is a smart move for investors of any experience level.
What Are Precious Metals?
Precious metals are organic chemical compounds prized for their rarity, shining appearance, and economic value. Many industries use precious metals in manufacturing, including the automotive, construction, and technology industries.
When most people think of precious metals, they think of gold, silver, platinum, and palladium. However, other members of the platinum family fall under that heading as well, including ruthenium, rhodium, and iridium. All these metals have a market value (though of varying rates) and fall under the broad umbrella of precious metals.
There are several different forms an investment in precious metals can take. Since they are a physical investment, precious metals have an actual physical weight and size and need physical storage space as well. You can buy bullion in the form of coins (including coin collections, which can be quite a profitable investment), rounds, or bars. Each of these has its own distinct advantages and disadvantages and investors should compare carefully before deciding which option is best for them.
Are Precious Metals a Good Investment?
Investing in precious metals is a simple and lucrative way to diversify your investment portfolio. One primary benefit of buying precious metals is the stability of their worth over time in comparison to paper money and many other types of investments. This stability especially exceeds that of investments like stock and exchanges. An upside of this is that precious metals insulate their investors from sudden fluctuations in the market. Because of these factors, precious metals are renowned for maintaining and sometimes even increasing their worth during severe economic downturns, giving them independence from inflation based on the value of the dollar. In addition to these benefits, precious metals have the bonus of being tangible investments, which many investors value as added security, since you can control and monitor them as literally as possible (unlike investments like stocks and bonds). We value our customers and promise a 100% secure shopping experience.
Investing with Metals.com also allows you to diversify your portfolio, a practice financial and investment advisors recommend. Diversification helps to insulate you from potentially drastic consequences should a single investment fail. Stocks can go up and down almost unpredictably, but precious metals tend to maintain or grow their value. Additionally, most investors will typically only have a portfolio made up of their local currency but investing in precious metals allows you to diversify in such a way that your portfolio becomes at least partially independent of national currencies.
The incredible stability of precious metals is clear in their ability to hold their value over time. Even certain other types of investments use precious metals, such as a precious metal IRA, to back up the value of the funds, protecting them in case of economic uncertainty.
Another benefit of investing in precious metals is the variety of ways to invest. There are options for which kinds of metals to buy and what form investors should take, whether that be in coins, rounds, or bars. One popular way to invest is by collecting rare precious metal coins, which are consistently a popular alternative due to their historic value. Investors can find precious metal coins ranging from outdated modern currencies to ancient legal tender.
What is the Best Way to Invest in Precious Metals?
Increasingly, investors hear the best way to invest in precious metals is through exchange-traded funds, or ETFs. However, there are several drawbacks to investing in ETFs rather than physical precious metals. One of these is that investors usually have no claim to the physical precious metals they are investing in until they reach an exceedingly high threshold. Even in this case, the ETF provider often has the right to simply pay you your investment in cash, meaning the worth of your investment rather than your physical precious metals.
Simply put, the best way to invest in precious metals is to physically own them. That way, you, yourself, oversee your investment. On top of that, tangibly possessing your investment ensures the best protection against risk if an unforeseen financial crisis.
How to Choose the Right Precious Metal to Buy
There are plenty of things to take into consideration when choosing which precious metal to invest in, that is why we have built our team on not just their leadership, but their extensive knowledge and insight to help you with your investment. Gold is a particularly popular choice for investors, as it is known to hold its value during times of market fluctuation and maintain this long-term. While it does tend to yield great returns, however, gold can also be quite expensive to buy, which may make it an unwise choice for first-time investors unless they have significant funds in place.
Silver may seem like a comparatively better choice for first-time investors, as it is much less expensive and therefore presents the opportunity to make multiple smaller investments over time. Silver’s widespread industrial use in every sector from technology to solar energy means it is consistently in demand. However, because silver is comparatively low-priced, and you will need to buy more to achieve a significant investment, investors may find it a difficult physical investment to store.
Palladium is a precious metal that has significant usage in the automotive industry, making it a highly valued substance for that sector. Palladium and platinum often follow one another quite closely in trends and market values, but palladium can be a useful investment to achieve further diversification of your portfolio.
Platinum is also often in demand in both the automotive and jewelry industries. In fact, it has often been more expensive than gold, making it a valuable investment that also tends to hold its value better during market fluctuations since it receives less market and investor attention than gold or silver.
There are other precious metals to choose from as well, each with its own distinct advantages over a variety of industrial sectors, and these may be good investments to diversify and strengthen your portfolio. However, the four listed above are the most popular investments due to their steady value and reliable increase over time.
How to Purchase Precious Metals
Metals.com is the best and most prudent way to embark on your investment. With the advent of the internet, investors can not only compare many different options, but do research into the topic of investment and precious metals and even draw on the knowledge of experts. You can also track market values in real time and even speak to other investors and financial advisors.
In the past, technology limited investors to buying in person or over the phone or catalogues, which narrowed their options and knowledge of their investments.
Historically, the best precious metals to invest in have been gold and silver, and the 2018 market promises to be no different. Gold ended 2017 in its most profitable year since 2012. Since the beginning of the year, both gold and silver have been holding steady gains.
What is The Typical Return on Precious Metals?
Investments in precious metals vary on return in a given year. Precious metals tend to do particularly well even when the stock market is collapsing, rising in value when the dollar is going down. When stocks go down, people tend to turn to alternative investments, fearing a market crash. This means that the value of precious metals rises quickly during times of economic uncertainty. The bottom line is that precious metals are security measures for many investors in a market full of sharp fluctuations and volatility.
What Are Risks of Investing in Precious Metals?
The nature of investment is that it always involves some risk. It is impossible to anticipate exactly how a certain investment will perform, and investors cannot bank of success. This is true of any type of investment, whether it be in stocks, precious metals, or anything else. For this reason, it is prudent to speak to a financial or investment advisor before making any type of investment, so you use your money as wisely as possible
One risk of investing in precious metals is the obvious potential for market fluctuations. It is always possible for the value of your gold bars to drop sharply or suddenly based on movements in the local or global market. Though precious metals tend to perform well and maintain their value, you should not regard them as a safety net or sure bet.
If you invest in a rare coin collection or similar item and are seeking a buyer, it may take a significant amount of time before you see financial gains. Such a process entails finding an interested party and arranging transactions with them. Similarly, if your collection has value because of its age or historical significance, it may take some time for it to gain enough value to garner buyer interest.
One last risk of investing in precious metals may seem obvious: they are physical investments and as such, are subject to theft. Thankfully, there are some fail safes available to you on this front, such as safes or bank vaults, if you are uneasy having a large tangible investment vulnerable in your home.
Are There Any Precious Metals That I Should Avoid?
In general, any precious metal is a fair investment. However, most investors focus on the “big four”, which are gold, silver, platinum, and palladium. This is for the simple reason that these precious metals carry the highest value and tend to yield the best returns. Some investors view gold as the most reliable (though also the most expensive) investment, since it tends to maintain a steady market value, while other precious metals like silver tend toward more dramatic fluctuation. On the other hand, some investors find it worthwhile to buy less popular precious metals like rhodium, which has a lower value but is also more insulated from severe market volatility. The metals.com team provides you with the best solutions to find what investment fits your needs. All, any of the metals that fall under the umbrella of precious metals is a fair investment with distinct advantages and disadvantages.
As with any investment, high-risk precious metals have the potential to yield high returns, while lower risk metals tend to yield lower but more reliable returns. Consider your personal financial situation and investment security. If you decide to make an investment in a higher value precious metal like gold, make sure you have funds in place to protect yourself if market fluctuations mean you lose the value of your investment. Precious metal investments are generally safe and reliable investments that result in returns, and investors can rest easy knowing that the gold or silver market will probably not wildly change from day to day. For this reason, investing in any precious metal can be a prudent move, though there may be one or another that better suits your financial situation and investment goals.
A small practical consideration exists for silver investors: because the price of silver varies from other precious metals, you will probably need to buy more physical material to make a sizeable investment. Realistically, this means you need to make sure you have adequate storage space for silver bullion, whether it be in bars, coins, or rounds.