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Tuesday, Feb 7, 2023
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Finance

7 Benefits of Investing in Precious Metals

In 2021, the global precious metals market was valued at $216.75 billion.

It’s no secret that precious metals are one of the most valuable commodities in the world. Unlike other forms of currency, they have retained their value over time, making them one of the best investments you can make today.

This article will tell you the 7 best benefits of investing in precious metals.

Keep reading to learn more!

1. Low Market Volatility and Risk

One of the most appealing aspects of investing in precious metals is its very low risk and market volatility compared to other investments. While volatility can never be 100% ruled out, most precious metals (especially gold) are recession-proof.

Inflation doesn’t affect gold and other metals as it does other investments. When inflation spikes, most people are eager to purchase metals, giving you a great return on your investment. They operate separately from other assets like stocks and bonds.

For those that avoid high-risk investments, precious metals are a great option to add to your portfolio. Metals like gold and silver are one of the most popular choices for safe-haven investments. This refers to investments that give investors more stability during economic crises.

Because of this, many investors use precious metals as a failsafe to protect some of their assets in periods of economic uncertainty.

In the past, the value of both silver and gold continued to rise during the great recession and the pandemic. Other investments crashed to the ground.

In general, precious metals are considered much more predictable and stable compared to real estate and other investments as well.

2. Ideal for Diversification

Because of the gradual increase in value and low risk associated with precious metals, it’s a great way to diversify your portfolio.

With that said, there are a few downsides to investing in precious metals. When it comes to brokerage and storage, there are extra costs associated with them.

They also don’t have the same tax advantages that you’ll find with other investments. You also won’t be able to see any short-term payoffs until you sell.

However, this is why they are a great alternative investment rather than a primary investment strategy. If you’re interested in diversifying your portfolio to fit your investment goals, reach out to a trusted financial advisor.

3. Tangible Products

In today’s increasingly digital world, most assets are intangible. There’s something powerful and comforting about having an actual, physical commodity that is backing your wealth.

The tangibility of precious metals gives them simple liquidity. This means that when you decide to sell, your broker or custodian simply makes it happen with little red tape. This is another reason why it’s such a valuable “haven” investment.

When you invest in precious metals, you have assets that are easily accessible as well. They are widely available from places like:

  • Banks
  • Market dealers
  • Bullion brokers

There is also an abundant supply, so you won’t have to worry about not being able to acquire enough.

4. Several Different Formats and High Liquidity

Another benefit is that there is a variety of precious metals that you can invest in. You can choose from coins, bars, and rounds. Different metals you can invest in include:

  • Gold
  • Silver
  • Platinum
  • Palladium

Also, compared to other assets that might be harder to sell, precious metals like gold and silver have high liquidity. There are always eager buyers when it comes to precious metals, and you can always get a reasonable price for them, especially when market conditions are right.

5. Universal Use

Precious metals aren’t just investments that sit there. Things like silver and gold are used in several products, including:

  • Cars
  • Electronics
  • Batteries
  • Phones
  • Jewelry
  • Silverware

They are very valuable materials when it comes to large-scale industries like solar panel manufacturers and medical products.

This means that gold and silver will always have a continuous demand in the market. This is a great benefit if you want to buy gold or silver.

6. Changing Prices

Just like other investments, the prices of precious metals fluctuate frequently. However, this shouldn’t hinder you from investing if you want to diversify your portfolio.

You’ll usually find that silver and gold are sold at affordable prices and can be flipped at a reasonable price. The main benefit here is that these investments will remain steady even through economic periods of uncertainty.

Even if the prices fluctuate, they are still great investments, so don’t let them hinder you if you want to buy silver, platinum, or gold. If you’re ready to purchase precious metals, find a trusted precious metal supplier like Sprott Money.

7. Self-Directed IRA Options

Another fantastic benefit of making precious metal investments is that the investor can open a self-directed IPA. This gives you much more control as an investor and makes the process more manageable, approachable, and comfortable.

You get to choose when you want to sell or buy. If you already have a 401(k) or an IRA, you can roll over your assets into a gold IRA.

Options For Precious Metal Investments

If you’re looking to invest in precious metals, there are several options available to you. Let’s take a look at a few:

  • Commodity Exchange-Traded Funds (ETFs)
  • Common Stocks and Mutual Funds
  • Futures and Options
  • Bullion
  • Certificates

ETFs are a convenient and liquid method of purchasing and selling metals, but you don’t get access to the actual physical commodity. Common stocks and mutual funds are shares that are leveraged against the price movements of the metals.

Futures and options are great options for people who want to bet big on metals. Bullion is strictly for people who want coins and bars and can put them in a safe deposit box or safe. Although it can be a safe option for disaster situations, it can be a pain to hold on to.

Certificates offer the benefits of physical ownership without any of the hassles of storage or transportation.

Ready to Invest in Precious Metals?

Precious metals are a great investment for several reasons. With the economy so unstable with inflation and global conflict, now could be the best time to invest.

If you want more of the latest financial information, check out our other articles!

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