Investing between 5% to 15% of your finances in precious metals is the new billion dollar move according to Hancock and Harwell. Financial planning, especially in the investment sector, has greatly evolved over the years. While investing in bitcoin, real estate, bonds, and equity were all the rage last year, investing in precious metals is today’s prudent choice. The scarcity of precious metals makes them very valuable not to mention their durability and workability. Precious metals; gold, silver, palladium, and platinum to be specific, make for a better investment option thanks to their ability to serve as commodities, investment units and money as well. Investing in these metals can be done via two ways. One, buying bullion bars and bullion coins and two, through financial products such as gold exchange-traded funds. They are a valuable addition to one’s investment portfolio and below are three reasons why you need to get on this bandwagon.
Their Great Demand
Market demand for precious metals will never go down at any point. The profit motive is often what drives investors’ investment decisions. Studying the underlying market can help one make informed investment decisions. Every precious metal has a different demand and supply profile. For instance, gold is seen as a good investment during economic uncertainties and inflation. Silver and platinum, on the other hand, do well during high economic growth.
Their Easy Liquidity
During periods of hyperinflation, precious metals can serve as flight capital. During a financial crisis, no currency tops in superiority over rare precious metals thanks to their many uses. Precious metals say the American Eagle Gold coin, are very easy to sell and buy. They can be converted into jewelry, made into coins or sold as they are. They have a large global market capacity, reliable and ever-present buyers, minimal transaction fees and a long proven track record.
They Are A Brilliant and Secure Way To Diversify Investment
While paper currency appreciates and depreciates over time and circumstances, the value of precious metals is not affected by inflation. This makes them not only a diverse investment option but a safer one too. It is during market crisis that diversification matters most. This is because alternative assets such as properties and shares become more intertwined with the stock market. However, investing in precious metals, for example if you buy gold bars from Money Metals Exchange, reduces this risk and preserves capital by protecting it against major declines.
Investors should consider the storage costs associated with precious metal investment. Some companies offer the use of vaults to store physical bullion bars, an option which is insured and more secure compared to safety deposit boxes. Nevertheless, do not rush into large stakes of precious metals without planning. A wise investment needs to be part of a strategy that hedges against global instability and volatility of the current financial markets.