Gold, Silver and Beyond: How to Invest in Precious Metal
There’s a reason why we call them “precious metals” — we only have a finite amount of gold, silver, platinum and other materials in the category.
And that’s precisely why precious metals make a smart addition to any investment portfolio. While the value of money can rise and fall, the supply of and demand for these finite resources remain relatively steady. In the past decade, for example, an ounce of gold has maintained a more-than-$1,000 value per ounce.
Of course, investing in precious metals isn’t as intuitive as some of the other holdings you may have. Here’s how to get the most out of platinum, silver and gold investments:
1. Exchange-Traded Funds (ETF)
In this case, investing in precious metals means you won’t get a physical bar of silver or gold.
Instead, investing in an ETF will have you buying into a so-called “basket of securities,” according to Investopedia. So, as others buy and sell the metals contained within the ETF, you make money off of their purchase.
As such, you don’t have any ownership in the metals themselves. This option is ideal if you want to keep your savings in a more liquid form.
2. Gold and Silver Stocks
Once again, this way to invest in precious metal won’t give you a chunk of gold or silver. Instead, you can invest in the companies that mine for these materials.
Do your research before choosing this option, though. Mining stocks can have less consistent valuations than the materials themselves. Some mining companies will shut down after hitting gold — you want to invest in something more stable, though.
Perhaps you want to keep things traditional and invest in physical metals. Indeed, this form might be the most stable option of all. According to this Investor Crate article, demand for gold, silver and platinum “does not seem to be decreasing any time soon.”
The major consideration to make before investing in bullions is storage. If you have access to a safety deposit box or safe, then you’re good to go. Otherwise, you’ll have to think about purchasing such a storage space — you don’t want to keep such valuable metals anywhere else.
On the other hand, some find bullions to be cumbersome to have. Plus, it’s not a liquid asset, so unloading bars for cash might not be as easy as an EFT or stock.
Finally, you can get an easier-to-transport version of bullions in certificates. These papers certify that you have, indeed, invested in precious metals. However, you carry with you the piece of paper, rather than the gold or silver itself.
This option is convenient, but it might not serve you in the case of a real economic disaster. It’d be hard to convince someone to trade your paper certificate for actual cash, so keep that in mind as you invest.
Make Your Money Shine
An investment can be a safe bet if you choose the relatively stable gold, silver and platinum markets. And, now, you know how to invest in precious metals in a way that suits your assets and goals. All you have left to do is put your money where the metal is and watch it grow with time.
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