Precious Metals Investments to Secure Your Portfolio

Precious Metals Investments to Secure Your Portfolio 5.00/5 (100.00%) 5 votes

For those looking toward precious metals investments for added security during trying economic times, nothing can beat the physical possession of a metal for absolute security. While there are plenty of other investment tools that are chronicled below, they tend to involve some reliance in other people. If you are buying gold or other precious metals in order to maintain some wealth when everything is going wrong economically, physically taking possession of it is the best way to stay safe.

Bullion and Coins

Bullion is the best way to go about investments in large quantities of gold or other precious metals investments. The problem is that the price can be prohibitive. The standard size for gold bullion is a 10-ounce bar that is made of at least .995 fine purity. At the time of this writing on July 2, 2013, gold is trading for $1,243 per ounce. That means that a 10-ounce bar would cost $12,000-plus. There are also larger bullion bars, so that’s not even the most expensive option.

In addition, once someone acquires gold bullion, they must also find a way to keep it secure. For those who do not have a reliable safe in their home, this may mean storing it in a safety deposit box at a bank. These are some of the logistical headaches that can accompany bullion purchases.

On the other hand, coins can be easier precious metals investments to make. They are smaller and thus more affordable. Their size and lower relative value also makes it easier to protect the assets inside your home. There are other complications though, especially with rare coins. Their value is influenced by more than simply the amount of the precious metal included in the coin. They are also influenced by rarity and significance. As a result, it is easier to be tricked into an unfair price if you don’t do your research. That pushes some people away from rare coins as precious metals investments.

Exchanged Traded Funds

For those who don’t want to do as much research and don’t have deep enough pockets to buy bullion, exchange traded funds may be the best option. These funds generally buy the gold bullion on their own, then sell shares in the gold. As a result, their price movement closely mimics the movement of the price of the precious metals in question. This gives people a method of investing in gold, silver, platinum and palladium that is a great deal more accessible.

The drawback is that you don’t have as much control. The fund may pay for operating expenses out of profits, thus decreasing your profits a little bit. Still, this is a worthwhile trade off for most people who are interested in exchange traded funds for their precious metals investments.

Added Security from Precious Metals Investments

Right now, there are serious threats of inflation and economic difficulty in the months and years ahead, which is another reason to put more of your portfolio in precious metals investments.

When there is inflation, investors rush toward gold and other precious metals investments because the metals will hold their value while the stock market may not during inflation. This is because the physical metals have literal value, whereas fiat currency is only supported by the trust people have in the government that printed the money.

Likewise, when the stock market struggles, investors rush to the security of gold, silver and other precious metals, which drives their value up.

During continuing times of uncertainty, it is wise to keep a significant portion of your portfolio in precious metals such as gold, silver, platinum or palladium.