In finance news, precious metals continue to rally. Why is there a sudden surge in gold or silver buying today? For many years, metals like gold and silver have always been considered as valuable. Due to the effects of inflation and the uncertainty of the global financial situation, many investors desire to hoard valuable metals more than ever. If you are considering an investment in tangible commodities, you may want to consider the information and investing tips below.
Investing In Commodities
Gold is probably the most popular commodity traded in the market today. This metal is known for its durability, malleability and ability to conduct electricity and heat. It also has some very practical applications in the fields of electronics and dentistry. In addition, it can be used for aesthetic purposes (jewelry) and as a form of currency. Today, the value of gold is determined by the market 24/7.
Silver and platinum are also popular commodities in the market. These metals, like gold, have actual value and can be hoarded for future trading or for insurance. Since these metals are tangible assets, they can be stored in safe locations and then later sold when necessary.
Factors That Affect Desire To Invest In Precious Metals
First of all, the uncertainty of the financial situation today, as reported in finance news, is a strong driving force that compels investors to store commodities that hold real or intrinsic value. Gold, platinum and silver have actual value unlike other investment vehicles. Stock certificates are actually promises that hold no real value in themselves. Paper money is just the same. Unless you use paper money to buy tangible assets, it will not have real value. Given that, a gold 401k rollover is something to consider, especially for baby boomers.
Inflation is another factor. Investors hoard gold because it maintains its value. Due to inflation, paper money decreases in value. Even when you hoard money, its worth will continue to decrease if it continues to sit in the banks vaults. In fact, after a few years, money in the bank will only retain a fraction of its original value. Regularly checking the price of gold versus the inflation of the U.S. dollar can lend some additional insight.
Choosing The Best Investment Options
There are several ways to invest in gold, silver, platinum and other commodities. However, there are investing tips you need to consider before proceeding. First of all, diversify your portfolio as a means to reduce risk. Never invest in just one option. Second, educate yourself on successful investment strategies. Hire a financial adviser to guide you throughout your investment endeavor. Remember that having a sound financial plan is a crucial aspect of an investor’s success.
Gold or silver coins and bars are definitely quite bothersome to store, but for people who have safe places to store them, these can become very good assets. Physical gold and other metals are good forms of insurance. If everything else fails, at least you can sell the metals you have in exchange for monetary value as needed. Nonetheless, if you have a time horizon, you may want to invest in other investment vehicles for diversity.
Exchange Traded Funds
Gold, silver, and platinum have ETFs. These investment funds are traded like stocks and form a convenient means of purchasing metals. They are very liquid and can be traded on a daily basis. However, if you want to use day-trading as a strategy, be sure to master it first on a practice account.
Stocks and Mutual Funds
If you have a big budget to invest, you can buy shares of miners. However, you have to be very aware of how stocks are valued in the market. If not, it is wise to have your account traded by fund managers who have shown excellent performances in the trading arena. If you have a lower budget, you can still trade through mutual funds pooled from several other investors.
Instead of storing bullion, you can invest in certificates. This provides you ownership of physical gold or other commodities, but the storage will be handled by a third party. However, unlike bullion, the certificates will hold no value unless you claim the actual gold from the storage facility.
Are Precious Metals Right For You?
Keep in mind that precious metals are immune to inflation since they carry intrinsic value. They can also offer insurance against financial loss, as long as you invest in their physical form, e.g. bullion or certificates. Hence, having them in your portfolio will greatly reduce your investment risks. Nonetheless, to become a successful investor, always be open to other investing tips and keep yourself educated and updated with the latest in finance news.