If you want to invest in a solid commodity, gold and silver are some of the best options available to you. Smart investors have known this for a long time, but if you are just getting started, here are some of the great benefits of investing in metals, as well as a few tips on how to get started.
Precious Metals Are a Solid Bet
The global financial system has been through a bit of a wild ride over recent years, and when the stock market is looking bumpy and the outlook is not clear, many investors turn to gold and silver to diversify their portfolios. This can be a great option, but it’s not always obvious how to get started. So what are the benefits for you?
Protect Yourself from Currency Devaluation
One key benefit of precious metals is that if the amount of dollars in circulation goes up and the currency devalues, the metal will not be affected. The amount of dollars needed to buy the metal will increase as well, so the value of the precious metal is protected.
Hedge Against Uncertainty
The best option for uncertainty is to hold actual gold or silver bars. These could even be used as currency, and many people believe that precious metals will hold their value no matter what happens.
Two Options when Investing in Gold or Silver
If you want to invest in gold or silver, you have two main options: Invest in the physical metal itself, or buy a financial security linked to the price of gold or silver. If you decide to invest in the physical metal, you again have two options: Bars or coins.
Buying Gold and Silver Bars
Gold and silver bars are often the most popular way to invest in previous metals. They contain almost pure gold or silver, and they tend to trade just above the value for the metals. Bars are a great option because they are easy to buy and store, making them very popular.
You can buy bars from large banks or bullion dealers. The type that you buy will differ, so it is worth researching them. For silver, Engelhard Silver Bars are perhaps the most well-known silver bars, which are all stamped for purity and weight.
Buying Gold and Silver Coins
Collectible coins are affected by demand for that particular collectible rather than the price of the silver or gold itself. So if you invest in collectible coins, it is not just the metal that determines the price on its own. You can buy these in many placesâ€”even on eBay. If you just want to buy silver or gold, it is therefore probably best to avoid collectibles.
Instead, focus on bullion coins. These are just like gold and silver bars, but in coin form, and their value comes primarily from the value of silver contained in them. Again, these can be bought via authorized dealers.
You can also choose to invest in an ETF, which is where you do not buy real gold or silver, but instead invest in a fund that tracks commodities or indexes. You could also invest in mining companies that mine silver and gold. However, you are not actually dealing with the metal, but with a company, and the company’s health can be affected by external factors.
Tips for Buying Physical Gold and Silver
You need to buy at the right time when you buy gold or silver. If times are tough, you may panic and turn to gold or silver when they are at record highs, only to sell when it’s low.
Choose physical metals for the safest bet. When you own physical metals, you get a direct pricing, and you know how much it is worth. This transparency is one of the main benefits of investing in precious metals.
You should also ensure you diversify. Don’t focus purely on precious metals, but instead use them as part of your portfolio.
Be very careful of scams. When buying real silver or gold, always carefully research dealers online, and search the U.S. Mint website for trusted dealers. You may also want to talk to other investors before you decide on a dealer.
And always do your homework so you know what you are buying. Even when buying from a good dealer, you need to get a detailed understanding of silver and gold trading, otherwise you can pay too much and you won’t make any money.
Start Investing in Gold or Silver
Precious metals can be an excellent option when you want to diversify your portfolio. This information should have given you a good idea about the options available if you want to invest, but nothing beats getting expert advice from a specialist. So don’t rush into anything, and start thinking about your options for investing in gold or silver so you can enjoy the benefits of investing in precious metals.
Anthony Luccaro, Jr. is Senior Vice President at Precious Metal Sales in Connecticut. Our background in the industrial marketplace has positioned us to support the individual or company that would like to invest in physical metal, be it coin, bullion, grain or the like. When you’re dealing with PM Sales, PM Coins and Bullion or any of our subsidiaries the message is consistent we are committed to customer satisfaction as well as a set of core beliefs that truly sets us apart.