There are various strategies available for investing in precious metals. Individual investors may purchase physical bullion such as coins or bars they store themselves or ETFs/mutual funds with portfolios containing precious metals or mining company stocks.
Precious metals offer investors inflation protection and real-life insurance against financial or political/military upheaval, which makes them attractive investments for many people. But whether or not precious metals are right for your particular goals and circumstances is ultimately up to you.
Gold
Gold has long been seen as an investment to protect against inflation and economic instability, providing an asset with low correlation with stocks and bonds in a portfolio.
Investors can purchase physical gold bars and coins that can be stored safely at home or with a precious metals dealer, however these investments come with additional expenses that go beyond spot price, including manufacturing and distribution costs, storage fees, insurance fees and tax implications when sold – such as paying higher capital gains rates upon sale.
Mutual and exchange-traded funds provide another means of accessing gold and silver without taking on the responsibility of storage. Such funds often hold mining company shares or futures contracts instead of physical bullion, and often feature lower expense ratios than their physical counterparts.
Silver
Silver is an attractive investment choice for investors seeking portfolio diversification, inflation protection and wealth preservation. Just like gold, physical silver bullion such as coins or bars can be purchased from jewelry stores or pawn shops; investors should note that physical metal purchases come with additional expenses related to storage expenses.
Exchange-traded funds (ETFs), which track the price of silver and other commodities without actually holding physical metals, may offer another way to invest in silver. While ETFs may incur higher management fees than traditional stocks or mutual funds, investors could also buy shares of mining companies producing silver that produce it themselves; such stocks may offer returns that exceed those provided by the metal itself. Silver plays an integral part in heavy industry as well as high technology applications like mobile devices, automobile electrical systems, solar-panel cells etc.
Platinum
Platinum is an attractive precious metal with numerous industrial applications, such as spark plugs, catalytic converters and certain fuel cells. It is often considered an alternative to gold when diversifying investment portfolios as it may hold greater potential for growth than its more-famous counterpart.
Investors can gain exposure to platinum through exchange-traded funds (ETFs) traded on global stock markets that invest in both bullion and futures contracts of this precious metal, though these investments carry different levels of risk and liquidity.
Gold-silver ratios provide insight into how the platinum market may behave in the short term, but should not be the sole basis of your investing decisions. To learn more about how best to invest in platinum, connect with a Morgan Stanley financial advisor; they can evaluate your goals and risk tolerance before designing an individualized investment strategy tailored specifically for you.
Palladium
APMEX recommends investing in precious metals as part of a well-diversified portfolio. Before considering an investment, be sure to carefully consider your financial goals and risk tolerance, consulting a professional as necessary.
Physical gold and silver investments provide long-term wealth preservation and diversification benefits, but must be stored and secured properly to prevent theft, which increases your total cost of ownership.
Use an exchange-traded fund (ETF) or mining stock as an alternative way of accessing the precious metals market without owning physical bullion. However, mining stocks and ETFs tend to be more volatile than their physical counterparts, and may incur additional fees and charges as these investments fall outside the SEC’s oversight protections.
Bitcoin
Investment options beyond buying physical metals exist as well, such as investing through exchange-traded funds (ETFs) that track them like GLD for gold and SLV for silver. Such ETFs store physical bullion safely within their vaults while offering shares representing their holdings – at least on paper – through ETFs that track them.
Precious metals are globally-recognized assets with high purchasing power that remain independent of local currencies or economic trends, providing an ideal diversifier to any portfolio. They don’t tend to correlate closely with stocks, bonds or real estate either – making precious metals an excellent way to diversify an otherwise conventional investment portfolio.
Precious metals investments are an ideal way to protect yourself against market instability and build your portfolio. From physical coins and bars, mining shares or streaming agreements, or royalties companies – investing in gold and silver should always be done after thorough market research has been completed.
