Financial advisors around the globe are encouraging many clients to turn to investing in precious metals as either an alternative to investing in traditional securities or as a way to diversify their investments. Investing in natural resources, including precious metals, presents not only a unique set of opportunities but also a unique set of considerations and factors to be kept in mind before making the investment decision.
Investing in precious metals adds a level of stability to a portfolio, and precious metals prices also tend to remain high in a more long-term and reliable manner than other investments. The options for investing in precious metals vary greatly, providing the investor with an optimal level of versatility and flexibility.
Knowledge of the Precious Metals Prices and Markets
The level of knowledge that many people have about the potential to invest in precious metals is somewhat limited. In fact, many people may have a negative view when it comes to these particular investments because in recent years, they have been portrayed as a way for paranoid extremists to stockpile gold in the event of global collapse. This has been further perpetuated with the rise in precious metals prices. In actuality, investing in natural resources, including precious metals, is a secure and stable addition to any portfolio, and not just a tactic used by people in the event of catastrophe.
Many people may also hold the belief that the only way to invest in precious metals is through the purchase of the physical commodity, in the form of bars, coins and bullion, but there are various ways to invest in metals. These include ETFs and buying stock in mining companies that product the metals.
Investing in Gold
Gold is primarily thought of as the most common way to invest in precious metals. Gold has a long history as being a sought-after and treasured natural resource. In fact, gold has been revered by kings, pharaohs, leaders and governments throughout the history of the world, and it remains a valuable commodity. In addition to its use in jewelry and gold bars, bullion and coins, gold also has other uses. Gold is known for its applications in wiring, electronics and computers, in cell phones and even in dentistry. The wide range of uses for gold is one of the reasons it is still very valuable in modern times.
Silver, like gold, is known primarily for its use in jewelry, but silver also has a variety of uses, which include the development of chemicals, in electronics and in solar panels. Silver is not as highly regarded as gold, but like gold, it is also a historically sought-after metal that was valued by societies throughout the world.
Silver has experienced somewhat of a downturn in pricing since the start of 2013, but many investors don’t see this as a negative—instead they see it as a buying opportunity, because the price of silver will undoubtedly rise again in the coming months and years, as precious metals prices always do.
Exploring the Opportunities of Platinum and Palladium
Platinum and palladium are two lesser-known precious metals that nonetheless offer investors tremendous, stable and long-term opportunities. Platinum is most known for its use in jewelry, but the incredibly durable metal is also used in the production of chemicals and medical treatments and in computer equipment.
Palladium, which is a very rare metal, is seeing an upswing primarily because of its use in the automobile industry. Palladium is not usually purchased directly by investors. When dealing with palladium most investors prefer more traditional routes, such as ETFs or purchasing interest in companies that mine the metal. The very limited supply of palladium makes now a great time to purchase this particular metal, because analysts see that as with other precious metals prices, the price of palladium will continue to rise.