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People have always loved rare and shiny things — the rarer and more difficult to get to, the better. Not even the modern era can dampen people’s desire for pretty and priceless jewelry, but there are smarter ways to invest in precious metals if you’re after liquid alternative assets to safeguard against economic distress.
Gold and other precious metals are called safe-haven assets for good reason. They allow you to hold into your wealth even when worst-case scenarios like recessions start playing out. We all know that on some level, but surveys show that 80 percent of Americans don’t take advantage of this opportunity yet.
Are you serious about diversifying your assets, whether you’re among the people who don’t yet own any gold or silver, or you want to explore investing in other precious metals? This guide is for you.
We’ll offer a short overview of precious metals worth investing in and show you what makes them worth your while.
Gold remains the most well-known and widely-traded precious metal across the globe. People invest in gold — whether to store at home or within a Gold IRA — during good times. They especially make a run on gold when times get tough, though.
Gold, as a store of wealth, can survive political unrest, the collapse of financial institutions, and inflation.
Buying gold bullion like bars or coins is a beginner-friendly way to invest in precious precious metals. While the value of gold fluctuates significantly in the short term (24/7, all year round), historical trends show that it steadily rises in value over the long term. The gold you buy today likely won’t be worth less in 20 years, in other words, and will almost certainly be worth more.
Gold is, therefore, in especially high demand when a recession is on the horizon.
Silver is another excellent investment option. Cheaper than gold, it’s an accessible option for most people.
Silver is more than a store of value. This metal also has numerous industrial applications (including in electronics), and that fact plays a role in determining its value at any given time. The silver market is less volatile than the gold market, but prices do fluctuate. Interestingly, the price of silver isn’t affected much by inflation and economic uncertainty.
Platinum is another precious metal with a wide variety of industrial uses, including in manufacturing, industry, and jewelry production. Some people invest in platinum with the aim of hedging against inflation, while others speculate on platinum.
Because platinum is significantly rarer than gold or silver, and because its value is driven by demand for industrial applications, its price is also more volatile. It is good to keep in mind that the largest platinum-mining operations are based in South Africa and Russia, and political unrest can affect the value of platinum.
Palladium is a rare precious metal in demand in some industries, especially in the automotive industry and medicine (particularly dentistry). The value of palladium has risen sharply in recent decades, and it’s not difficult to find palladium bullion from reputable sources.
Alternative Precious Metals
Other precious metals such as rhodium, iridium, and ruthenium can also be interesting to investors. These metals have specialized industrial applications and can be hard to obtain, but they may be a good way for investors to diversify their portfolios.
What to Consider Before Investing in Precious Metals
Gold and other precious metals have a place in any investor’s portfolio, but it’s important to consider which options are best for you. Bullion bars, coins, and Exchange-Traded Futures are among the most sensible ways to invest in precious metals.
Always conduct in-depth research into market trends and make sure you fully understand the factors that can lead to price fluctuations before investing. Consulting a financial advisor can be an important step in this process.
Exploring the benefits and risks of the different investment options, including bullion and ETFs, is also critical. For example, a Gold IRA or Precious Metals IRA is an exciting alternative to a traditional IRA, but investors should keep in mind that purity and other eligibility requirements have to be met in this case.
Likewise, people interested in self-directed IRAs should carefully choose an adequate custodian, as IRS regulations don’t allow these assets to be in the portfolio holder’s personal possession. By storing your precious metals with an approved depository, you can comply with IRS rules, enjoy the benefits of a self-directed IRA, and trust that your assets are in safe hands.