You may have heard people talk about investing in metals. This can be a good idea, especially if you want to protect your investment portfolio against inflation rates. People always look to things like gold when things get tough, so it can help you if things in the economy take a turn for the worst. Gold and other metals have got way more popular over the past few years. There are contradicting opinions on the subject of course, so it can be hard to know what route to take. Read on to decide if you should invest in metals:
Many people say that investing in metals like gold and silver keeps an investors portfolio looking balanced. However, you should never think of it like the be all and end all of investing. You should never plug too much money into any one thing. This would make your portfolio unbalanced. Metals can be a suitable defensive strategy against economic changes. However, many experts agree that they’re not the greatest investment you can make under normal circumstances. Make sure you limit your percentage if you plan on investing in metals. Make sure that you never have more than 3% of your portfolio invested in gold.
Your investment can often take two forms. Sometimes people go and buy physical metal and then keep it safe somewhere. Literally, some people have blocks of gold (or coins) sitting in a safe somewhere. However, you can also buy precious metal ETF. This is basically where you buy stock. The price of the stock is tied to the value of the metal, meaning that this represents you owning the metal. If the value of the ETF rises, so does the value of the metal.
Remember, you have many options when considering this route too. Gold and silver are your obvious choices, but platinum could be a good choice too. Even palladium could be a good idea!
There are obvious benefits of investing in metals. It’s usually said to be better than owning a share of stock, as you actually own a piece of precious metal. Plus, there isn’t much of it in the world. Obviously it’s mined all of the time, but the amount of it isn’t growing as fast as other things.
However, if you think that buying into metal will be a get rich quick scheme, you’d be wrong. There might still be increases in value, but you won’t get rich quick with it, unfortunately.
Ok, so you know you want to invest in metals (or you don’t, in which case, stop reading). How do you get started? You can try one of the following:
- Stocks and mutual funds that have shares in the mining industry.
- Exchange traded funds that have bullion – this is a metal valued by weight.
- Antique coins.
- Newly made coins.
Are you going to invest in metals after reading this post? It has its pros and cons, so you need to weigh up what’s right for your personal situation. Good luck!