If you are looking for an effective way to diversify your investment portfolio and protect yourself from a stock market crash, you may be wondering about precious metals.
Depending on the metal you choose to invest in, your investment in precious metals can be a safe investment or a risky investment. Like most other types of investments, there are a host of different factors to consider.
There are also various ways in which you can acquire precious metals for investment purposes. While owning and storing the physical metal is always an option, alternative methods may be more suitable for your investment goals.
So, are precious metals a good investment? Let’s find out!
What are precious metals used for?
The physical metal has been used in a variety of applications throughout history. In the case of precious metals, decorative uses are fairly common, though there are practical uses for these physical assets as well.
Gold – arguably the most well-known of the precious metals – is often used in jewelry, art, or to make gold coins. Similarly, silver is also available in the form of silver coins, bullion, and other types of bullion, as well as jewelry and cutlery.
Platinum, another precious metal, is often used in the automotive industry to manufacture auto parts. It is also used in the manufacture of medical equipment and jewelry. Finally, palladium is a precious industrial metal used primarily in catalytic converters.
Different ways to invest in precious metals
There are several different ways one can start investing in precious metals. Since these options remain essentially the same across different types of metals, let’s just keep things simple and focus on gold.
The most common way to invest in gold is to actually buy gold bars (such as gold bars or coins). You can also buy gold jewelry, though – since the value of gold jewelry often depends so much on the craftsmanship in the piece itself – this isn’t usually the best route to take.
If you’d prefer to take a different approach, you can also invest through a mutual fund or through a precious metals ETF. Investing in gold ETFs (exchange-traded funds) doesn’t give you direct access to gold itself, but it does make it easier to track the price of gold in your portfolio along with your stock market trades.
Advantages of investing in precious metals
You will enjoy a few different benefits if you decide to make investments in precious metals, although the exact benefits will vary depending on the specific metal you are investing in.
Gold supply and demand are major factors affecting gold prices. Unlike stocks and most forms of currency, gold prices are relatively independent of the market, which causes many to consider it a safe-haven asset during economic downturns.
The same applies to the prices of silver, as well as the prices of other precious metals. Every investment in precious metals can hold (or even gain) value as markets take a turn for the worse, essentially acting as a hedge against inflation,
In addition to the limited links with the market, precious metals can also be an investment decision that enables you to diversify your portfolio. By adding precious metals to your portfolio, you can help protect them from the market.
Cons of investing in precious metals
Of course, there are some negatives to consider before investing in precious metals. Like any other type of investment, there is no guarantee that your precious metals will retain their value. Unlike stocks or bonds, precious metals do not generate interest, which means you will rely on price hikes to make a profit.
Also, it is worth noting that you will be spending money on storage if you decide to purchase physical minerals. Whether you store it at home or in a secure warehouse, keeping your metal safe will require a little bit of financing.
Best places to buy precious metals online
Now that we’ve gone over the pros and cons of precious metals, you’re probably wondering where you can start buying them. Below, we’ve rounded up three trustworthy online merchants for your consideration.
Augusta Precious Metals
Augusta Precious Metals is an online precious metals dealer that sells a variety of coins and bullion products. Its specialty, however, is the Gold IRA, which helps clients get started investing for retirement using their precious metal purchases.
Click here to learn more about the process!
Acre Gold is a unique online marketplace that allows customers to finance their purchases of precious metals. For as little as $50 per month, you can start making gold bullion payments. Once you pay the full price, you can have the gold shipped directly to your home!
Click here to get started!
Jim Bullion offers free shipping on orders over $199 and is a well-known and respected online precious metals retailer. Offering one-on-one consultations with experts to help you through the selection process (if desired), Jim Bullion’s vastly broad portfolio of products offers everything you need on one platform.
Check out the latest offers by clicking here!
Whether you decide to invest with physical metals or through a precious metals ETF, it’s worth adding precious metals to your portfolio. Not only does this strategy help reduce risk through diversification, but it can also help you limit your exposure to the market!
Are precious metals a good investment? Well, there are some drawbacks (such as price volatility, storage fees, and insurance costs). However, in general, we believe that precious metals are an asset type worth investing in. Any type of investment has its drawbacks, but – for precious metals – we believe the benefits outweigh the risks.