Investing in Metals: Tips Beginners Need to Know

Gold prices rose by more than 20% in 2020. Silver rose 47%.

Investors sink their money into precious metals during periods of market volatility. Are you thinking now is the time for you to start investing in metals?

It’s never a bad time to start. Check out this guide for how to invest in metals.

Metals for Investing

Financial experts recommend precious metal investing as a way to diversify your portfolio. Metals also make great long-term investments because they maintain their intrinsic value.

That doesn’t mean the price won’t fluctuate. For a period of 20 or 30 years, the price of your metals should rise steady enough to see a profit.

Experts warn against over investment. Metals should be part of a portfolio. They shouldn’t be your entire portfolio.

Investing in Gold

Gold has long been a valuable commodity. It is rare and sought after for currency and jewelry. It’s the first metal investors buy during a market drop.

Investing in Silver

Like gold, people use silver for jewelry and currency. Unlike gold, the silver market fluctuates.

Why? Silver has far more industrial use than gold. The industrial function of this metal contributes to its supply and demand.

Investing in Platinum

Platinum is an industrial metal like silver. It is rarer than gold and often trades at higher prices.

The automotive industry uses platinum to manufacture catalytic converters that mitigate emissions.

Platinum’s rarity and industrial use make it the most volatile precious metal.

How to Invest in Metals

There are four ways to invest in precious metals. They are physical ownership, certificates, ETFs, and mining stocks.

Physical

This is where you buy the metal from a seller. Gold and silver bullion are the most common purchases.

People prefer physical metal because it’s a guarantee of ownership. You’ll still have it even during the worst market cataclysm.

It is inconvenient to store and sell. Physical metal can be stolen or lost.

Certificates

Certificates are proof of ownership without the physical product. They are convenient because they don’t need extra security and protection.

Some investors shy away from certificates. They’re only worth the paper they’re printed on during an extreme economic collapse.

ETFs

Exchange-traded funds (EFTs) are a combination of commodity stocks and bonds. They are like mutual funds but traded like stocks on the market floor.

Investors prefer ETFs because of their easy trade. They are more liquid than physical metal or certificates. This easy trade yields more short-term profits.

Mining Stock

Mining stock is a precious metal investment without owning any precious metal. You buy stocks in the company producing the metal.

Their value rises and falls with the price of precious metal. Investors love the liquidity of these stocks, but don’t like the variability. Mining stock fluctuates based on price and supply interruptions.

Supply interruptions cause the stock price of individual mining companies to drop.

Get Started Investing in Metals

There’s a reason why many investors turn to metals when the market trends down. Investing in metals is a safe way to diversify your portfolio. They protect your money from economic disruption.

It’s impossible to know what the future holds. Protect your money with a metal investment today.

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