Precious metals are widely accepted as a safe haven during economic crisis. They also tend to increase during stock market declines.
However, precious metals aren’t without risks, just like any other asset class. Here are some things to look out for when investing in precious metals:
Investing in Gold
Gold is a safe investment option for those who are worried about the future of their currency and want to hedge against economic risks. It has a track record of strong returns, liquidity and low correlations, which can help to diversify portfolios.
Physical gold is available in bullion, coins and jewelry and can be purchased directly from a dealer or through an online broker. It can also be stored in a secure vault.
ETFs and mutual funds are another way to invest in gold. These exchange-traded funds (ETFs) are designed to track the price of physical bullion and can be a good way to invest in gold without having to deal with the hassle of physical ownership.
If you do decide to buy physical gold, it’s important to choose a reputable dealer. Be wary of pushy salespeople and other unscrupulous businesses, as they can inflate the value of their product and rip you off.
Investing in Silver
If you’re on the path to trust in precious metal investment companies, silver can be a good choice. It’s a safe and reliable investment for people who want to diversify their portfolio holdings or hedge against market volatility.
It’s also less correlated to asset markets than gold and other precious metals, meaning it can help you reduce your overall risk by increasing the diversification of your assets.
Depending on your investment needs, you can buy physical silver bullion or ETFs that track the price of silver. The latter are a better choice for those who want to hold their investment over a long period of time.
Another way to invest in silver is through shares of companies that mine the metal. Those shares rise in value when silver prices go up, but they also have risks of their own. Mining stocks are also speculative and may not be a good choice for investors who want to maximize their returns.
Investing in Platinum
While gold and silver are the most well-known precious metals, platinum is often overlooked. However, it is a safe investment option and has a wide range of uses in many industries.
There are a few ways to invest in platinum: buying coins, investing in physically-backed exchange-traded funds (ETFs), or owning shares of a mining company. These options all come with their own advantages and disadvantages, so it’s important to decide what suits your needs and budget.
One of the more common ways to invest in platinum is through an ETF. These are listed on a stock exchange and allow investors to buy shares, much like they would a stock.
This method of investing is relatively cheap and allows you to have a larger portion of your money invested in platinum than you can with physical bullion. This can be beneficial for those looking to hedge against inflation or who want to take advantage of the metal’s price volatility.
Investing in Palladium
Palladium is an increasingly popular precious metal among investors, and it’s an excellent choice if you’re looking for something rarer than gold and silver. It’s also more affordable than its counterparts, so it can be a good option for those looking to diversify their portfolio.
One of the best ways to invest in palladium is by purchasing an exchange-traded fund (ETF) that tracks the price of the metal. Examples of ETFs that offer this option include Sprott Physical Platinum and Palladium Trust (SPPP) and Aberdeen Physical Palladium Shares (PALL).
Alternatively, you can also buy physical assets containing palladium directly. These can include palladium bullion bars, coins or collectible palladium coins.
The most common use for palladium is in automotive catalytic converters, which remove harmful emissions from exhaust gases. These are becoming more important as governments around the world tighten environmental regulations, forcing automakers to increase their use of palladium to meet these requirements. This has boosted the prices of the precious metal.