A lot of people who consider themselves as savvy investors have no or little direct experience with the alternative investments like precious metals. The reasons behind it are plentiful and diverse, yet some common reasons are price fluctuation, risk aversion because of subject’s complexity, and limited role’s knowledge that the precious metals may play in balanced portfolio.
Precious metals that include palladium, platinum, silver, and gold are used as an investment to offset risks and serve as hedge against inflation. Typically, one owns some investment assets in a full portfolio. The precious metals tend to be considered as insurance policy for each of all your assets, since the price of both precious metals like silver and gold moves inversely to the economy. If the stock market is up, they are normally down a notch. If the stock market crashes, the precious metals take on a new luster as most of you have seen on recent great recession.
So far, all those mentioned precious metals have kept stability in their respective range of spot price. Gold is trading at the same price as the start of the year. On the same 6-month time period, silver is up to six percent, palladium is down a modest three percent, and platinum is down eight percent.
If you’re an investor who wants to consider a foray into the ownership of the precious metals as a part to a balanced portfolio, here are the do’s and don’ts.
How to purchase gold.
Keep your investment in precious metals scalable. Majority of the financial advisors highly recommend a particular allocation amount of between five to ten percent of the total investable assets. That is the reason why the precious metals are considered as an insurance policy or hedge against some investments in your portfolio. The precious metals may also be added to other IRA accounts.
Educate yourself. You must know and understand the difference between numismatic and bullion products.
Pay attention on the spot prices as well as research selling and buying trends. The spot prices are basically the exact amount that precious metals are trading per ounce and may be viewed in real time. With the available technology today, it is possible to do research and see how the prices behaved relative to the common economic factors.
Make plans for storing precious metals investment. Boxes for bank safety deposit don’t insure precious metals. If your investment is actually substantial, look for storing precious metals at a secure depository.
Purchase only from disreputable or unauthorized precious metals wholesalers. Seek for dealers with solid history to do business in the industry. Good guys must be easier to spot compared to the bad guys and a great place to start is checking with the reliable organizations.
Over-invest! Investors do not call this gold fever for nothing! The best financial advisor may guide you to a proper level of precious metals investment. Remember that your goal is having a balanced portfolio and having precious metals as part of internal insurance policy.
The industry of precious metals investing is complicated yet a rewarding option for all savvy investors out there. Just remember to do due diligence and use common sense.