Precious metals, including gold, silver, platinum, and palladium, have many uses and benefits, not the least of which is their unique properties that make them a great investment option.
Read on to learn about some of the benefits of investing in precious metals.
1. Low Barrier to Entry
Unlike many investment vehicles that require multiple steps, brokerage accounts, or a lot of red tape, investing in precious metals has a relatively low barrier to entry. The easiest way to invest in these metals is to simply purchase the physical assets in the form of coins, bars (bullion) or even jewelry.
While it’s possible to invest in them through ETFs, mutual funds, stock options or by purchasing shares of precious metals mining companies, the quickest and easiest investment option is the old-fashioned way, in physical form. It’s as simple as purchasing from a dealer, individual or online seller.
In addition to being easy to purchase, what’s better than being able to hold your investment physically in your hands? Unlike stocks and other investments that you’ll never see beyond the computer screen, precious metals are tangible assets that carry real weight. You can hold them in your hand, store them close by, take them with you wherever you go, pass them down to your children and sell them whenever you want. Furthermore, they’re indestructible and won’t be damaged by fire, water or the passing of time.
Owning physical precious metals means their all yours to do with as you please.
Investing in precious metals is also a great way to diversify your investment portfolio. Holding different types of assets reduces your risk and the potential impact of negative changes to a single type of holding.
Gold in particular, is a non-correlated asset, which means its value isn’t tied directly to changes in the market. For example, equity markets are easily impacted by the state of the economy and current events; and when interest rates increase, bond prices usually decline. Gold, however, tends to hold its value and be less volatile during market turmoil.
4. Safe Haven
This stability during challenging economic times has earned gold it’s designation as a safe-haven investment. It typically retains and even increases in value during times of economic volatility. A diverse portfolio that includes a safe-haven asset like gold is less exposed during long-term market downtowns, making them a great option for investors.
Unlike other investments, precious metals are unaffected by governmental issues and hold their value on a global scale.
5. Highly Liquid
When it comes time to sell, precious metals are yet again a great asset to invest in because they are highly liquid. They can quickly and easily be exchanged for cash, usually without losing substantial value. And because they are a scarce resource with limited supply, there’s always demand for precious metals. This makes them easy to sell when the time comes.
While there will always be new and more innovative investment assets to come to the market, precious metals will likely always be valuable thanks to their scarcity, widespread use within various industries and their beneficial investment properties.