How to Invest in Precious Metals * Investor Insights

How to Invest in Precious Metals

By Susan Lassiter-Lyons | Alternatives

Feb 22

When you think about metal, what do you think of?

Yeah, us too.

But if you’re an investor, it’s all about the precious metals.

What do I mean by precious metals?

I’m talking about gold, silver, and all the other metals you may see walking by a jewelry store.

These are commodities just like every other asset. They’re available for you to invest in.

But you don’t need to be Scrooge McDuck to invest in precious metals.

Nor do you need to be like a certain freaky deek real estate “guru” who shall remain nameless (but it rhymes with Freston Freeley), buying gold in raw form and storing it in his backyard bunker in case of an apocalypse.

As with any other commodity, just remember to start slow and research before making any major moves.

Most metals are tied to the discovery and perceived worth of the metal at any given time.

They can be the perfect assets for people looking to diversify their current portfolio without dipping their toes into startups or human-created risk.

Gold and silver are the standards for precious metal investment.

If you’re looking to start investing in precious metals, it helps to start with the granddaddy of them all: Gold.

Considered the backbone of currencies, gold is highly prized for its stability and usefulness. It’s considered an “eternal metal,” one that won’t ever hit zero value.

You can invest in gold in stock form a la specialized companies like SPDR Gold Shares.

But you can also appease your inner Freston Freeley and purchase it in bullion or coins. Offsite storage options are available for those without a proper storage unit who still want to invest in gold.

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Silver can be more practical in tough times and is basically the Avis of the metals. We Try Harder!

In addition to buying it in bullion or coins, there are options to invest in mining and financing of mines.

Don't forget about unconventional and high tech metals!

The technology boom created a demand for many metals specialized for use in computers.

Cobalt may not be a metal you think of investing in at first glance.

But it makes the list of new metals that stand to increase in value due to new technology, especially for metals associated with computers.

Self-driving cars and improvements in battery technology place cobalt and lithium on the list of hot metals for investment. Electric cars will change up the market even more.

One precious metal that has been left out of a lot of conversations up to now has been platinum.

This metal is definitely more “useful” than gold, considering it can be used for more practical uses like machinery. But platinum is also a relatively small market. It’s known to be volatile. You might want to hold off on this one until you feel comfortable investing in gold and silver.

Palladium and uranium are both available for investment, and demand looks rosy! Both metals operate from very limited supply sources. But both are poised to become ever more necessary as technology reaches more parts of the world.

Like oil, you never know when a mine is suddenly going to be discovered and send these assets into flux.

Should you buy precious metals in assets or in stock?

As with many investment questions: It depends.

If you have the means to store precious metals such as gold, you have every right to do so. People sometimes own coin collections (often including gold) for this exact reason.

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Let's just hope the US government doesn't confiscate our gold like they did in 1933!

If you live in a country at risk of war or a major currency shift, buying precious metals in raw form may be in your favor.

But this honestly doesn’t apply to most investors. Nor is it feasible for desirable-but-volatile metals such as uranium. (Wait, didn't Hillary Clinton already sell all our uranium to Russia?)

Most precious metals offer conventional investment options.

Exchange-traded funds (ETFs) are a viable option for many metals.

Mutual funds may be available depending on the metal.

Keep in mind that many precious metal stocks may be tied to mining and other futures involved with the actual extraction of the metal.

Make sure you know exactly what you’re signing up for, and that you feel comfortable handing your money to the company behind the results!

Research your preferences and watch the market.

Precious metals have opened up to allow many different levels of investment.

Not every metal requires immediate investment, nor does every metal offer investment options that may work with your portfolio.

If you’re not comfortable investing in raw material or extraction companies, not all of the classic metals will be for you.

But there’s still risk in investing in stocks around precious metals.

You’re still “doing it right” even if you’re not moving gold bars into a storage unit.

Research what’s right for you, and have fun investing in the treasures of your choice!

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