With all of the movement in bullion prices, you might be considering precious metals investments. Or perhaps a friend of yours has earned money buying and selling silver and gold in their investment portfolio.
There are numerous reasons why investing in precious metals can be a good idea. It is not only due to current prices potentially signaling that it is a great opportunity for you to get involved or because bullion is such a popular investment.
The following are seven great reasons why you consider investing in precious metals:
1. Barrier to entry is low
It might be exciting investing in stocks. However, you usually need to go through a broker to buy stocks and sell them. There are also several hurdles and forms involved. And real estate has tons of paperwork.
However, when buying and selling precious metals there isn’t a lot of red tape that you need to worry about. That is because purchasing silver, gold, and other types of bullion are almost as easy as going to Amazon and buying a book or visiting a department store to buy a shirt.
This being said there are some dangers to precious metals investing especially when it comes to investing in metals with your IRA. That is why it is best that you work with the gold IRA companies that you can find. Take the time to research this before you start investing and you’ll save a lot of money and headaches.
2. Hedge against inflation
As the saying goes, money isn’t worth as much as used to be. That is the truth. Have you seen how high the prices are on things like lumber, gas, or groceries lately?
Over the last hundred years, the dollar’s purchasing power has continued to shrink.
As the dollar as well other types of fiat currencies continue to decrease in value, silver, and gold march to a different beat. When the dollar is stuttering that can be a very good thing because during these times precious metal prices tend to soar. Over and over again, it has been proven that precious metals are solid during shaky economic times.
3. Tangible asset
Although your corporate piece of the pie might be represented by company shares unless you hold a high number of shares in a company you don’t own the business. The same thing is true with your home. Unless you own it free and clear, outright – and do not have a second mortgage or mortgage – then it is not your house.
However, when it comes to precious metals, they are yours. Even when your bullion is stored as part of your precious metals IRA (individual retirement account, learn more here: https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras) the asset is yours. That means you can sell it, give it to your family, or do whatever you want t0. Owning precious metals brings great feelings of satisfaction and security.
Silver and gold bullion are tangible asses. You can physically own them.
4. High liquidity
It is one thing to invest in. However, earning a high return on an investment is a completely different thing. It is often complicated to sell investments. Think of houses in dying cities where people are moving to better areas or a property located in a neighborhood where pollution or crime is on the rise. You might not get the money that your paid for the property and might not be even able to sell it.
However, silver and gold? They are different. It doesn’t matter whether the economy is bad or good, there are always lots of buyers ready to purchase your precious metals, and at a good price. This makes metals very liquid investments.
5. Timeless investments
Consider some of the investments investors are paying big money on right now, that did not exist 20 years ago, 40 years ago, or 50 years ago. Do you think of non-fungible tokens or cryptocurrency?
Now consider silver and gold. These two precious metals have been treasured by people for over 5,000 years. There might be some investments that could suddenly disappear the next time there is a cyberattack. However, silver and gold are here to stay, along with other types of precious metals. No matter what, they will always be considered to be valuable and highly coveted.
6. Portfolio diversification
Everyone has been advised to not put all of their eggs in one basket. That applies to precious metals as well. Your investment portfolio should never only have one kind of asset in it.
In this respect, one of gold’s biggest strengths is a type of non-correlated asset. That means that the price of gold tends to move independently of the other markets, such as stocks and bonds. That ensures that you will receive the benefits of having a truly diversified portfolio.
7. Safe haven
Both silver and gold are well-known as being safe-haven investments. What that means is those metals offer stability during tough economic times. Even when the economy is bad, gold prices tend to hold their value or even increase.
Another positive aspect of safe-haven investments is that silver and gold are free of meddling from the government which could impact their value.
Precious Metals Investing Options
There are so many good reasons for investing in precious metals. However, there are also many different ways that you can get started with investing in silver and gold. The first step is to know what options for precious metals are available to you.
Coins can be both collectibles and investments.
One of the more common ways to invest in bullion is to use precious metals to buy coins. The most popular options are silver and gold coins, but palladium and platinum are becoming more popular as well.
One of the numerous benefits of bullion coin investments is that the government mints and guarantees them. And since they are monetized, that means they are always going to be worth their face value at least and could be spent as a form of money theoretically.
Usually, rounds cost less than coins. However, they can provide the same form of aesthetic appeal that coins do. Rounds are highly collectible as well, which means they have a dual market of both exonumia (such as rounds) collectors and bullion investors.
Precious metal rounds usually are a product that private minters offer. There are some government mints – which includes the U.S Mint – that sell non-monetized precious metals that are classified as rounds.
There are different sizes of silver and gold bars that are available.
Out of all three, this option is usually the least expensive one. Bars, gram for gram, offer the most economical way to own precious metals.
Similar to rounds, private ventures usually produce bars, although there are some government mints, such as the Royal Canadian Mint, that produce and distribute ingots.
In the meantime, many private mints selling bars are now very well-known in the silver and gold stacking world. The products that they offer are just as collectible as they are a bullion asset.