Investment Strategies to Consider as a Beginner
Of the four major types of Precious Metals in the marketplace, Gold, Silver, Platinum and Palladium, each offers a distinct benefit for beginning investors. While certain best practices apply specifically to acquisitions of Precious Metals, many of the basic principles of smart investing also apply. For anyone looking to enjoy the benefits of adding safe-haven investments to their portfolio, or even people beginning to build a nest egg, here are several Precious Metal investment strategies to help you get started.
Gold, Silver, Platinum and Palladium are called Precious Metals because they are rare, with only a limited amount available to be extracted from the Earth’s crust. These resources cannot be picked up just anywhere; they must be removed from mines and processed into a usable form. This necessary step makes the available supply even more restricted. Precious Metals, namely Silver and Gold, are also considered a type of money by most nations. This role in the world’s economy began many years ago but is still supported today because, unlike paper currency, Precious Metals cannot be produced at will. Because of this fact, they frequently compete with the money printed by sovereign nations, with values partially determined by how strong the U.S. dollar is compared to other major currencies.
Strategies for Investing in Precious Metals
Diversify Your Assets
Financial advisers generally agree that Precious Metals are an essential way to hedge your investments during times of economic turmoil. Money printed by governments has value because the issuing nation says so. If a country seems to be thriving economically, people put a higher degree of faith in their currency. Precious Metals operate differently, however, with values determined by production levels, supply availability and industrial demand. At times when it seems the world’s largest economies are on the brink of a downturn, investors can expect the value of Precious Metals to go up, making these assets a crucial safe haven.
Buy Physical Coins and Bars
Purchasing a few bullion coins or bars is the perfect way to get started. Gold and Silver coins are produced by many countries around the world, with guarantees of face value to protect your investment even if the price of Precious Metals should someday plummet. Acquiring bullion bars is also an excellent way to familiarize yourself with the entire process. You can also use your holdings to give you a point of measure when watching the changes in market prices. Silver coins can be purchased with nearly any amount of seed money. Platinum bullion is unique because it is only produced by a few places in the world and therefore has supply levels that can change considerably from year to year. As a beginning investor, owning some amount of all Precious Metals helps you learn the unique movements of each within the marketplace.
Storing Precious Metals
For new investors, a small acquisition can be easily stored in a safe or bank safety deposit box. As your holdings grow, you will need to consider more secure storage options. Professional facilities explicitly designed for Precious Metals storage will protect the quality of your bullion while also protecting it from theft. The best options include 24-hour on-site security, climate-controlled environments and options for delivery if you ever want your investment sent to you.
Gold, Silver and Platinum Futures
Precious Metals futures are financial tools that appeal to many new investors. Any futures contract will be traded on an exchange and have built-in delivery mechanisms for the parties involved. Once you buy a Silver or Gold future, you have the option to become the physical owner during the delivery period if you feel the price you paid for your futures contract was a good deal.
The Best Time to Buy Precious Metals
As with any stock or commodity, the markets shift back and forth between positions of optimism and pessimism. Therefore, beginning investors must pay attention to the short, medium and long-term perspectives on Precious Metals and use the information when making purchases. If the stock markets are up but many economists believe a bearish time is coming, it could be a good time to buy Gold and Silver. If the automobile industry, a well-known top consumer of Platinum and Palladium, seems poised for growth, this could also mean a good time for acquisitions.
The Best Time to Sell Precious Metals
When the demand for Precious Metals surges, that is always the best time to sell. Whether it is for industrial needs or because governments are increasing their stockpiles for a rainy day, when the world’s interest in buying increases, it is time for beginning and experienced investors alike to examine their holdings and consider a sale. One of the best features of using Precious Metals and an investment tool is there will always be a demand. Unlike companies that go bankrupt or stocks that could lose much of their value in one day, Gold and Silver have been around for centuries. If you need to cash in on your investment, as long as market prices allow you to make a profit, it can be an excellent time to sell your Gold and Silver.
Opening a Precious Metals IRA
For beginning investors that are primarily interested in saving for retirement, a Precious Metals IRA is a strong option. You are able to enjoy all of the benefits of physical investments in Gold, Silver, Palladium and Platinum with the added protections of a regulated retirement account. You can easily add Precious Metals to your portfolio using an existing IRA or employer 401(k) account, with no need for cash on hand.