Questions To Ask When Investing in Precious Metals

We all know that investing in precious metals is a great alternative to stocks and Bonds. For one, it gives buyers ownership over their gold asset with no liability whatsoever. However, this doesn’t mean you should jump into these investments without having adequate knowledge. As a rule of thumb, you should always make your detailed research and evaluate your options before investing in any precious metal.

In this article, we’ll touch on four questions you should ask when investing in precious metals.

What are the advantages of investing in precious metals?

One of the main advantages of investing in precious metals, such as gold, for example, is that it is considered a store of value -it manages to maintain its intrinsic value. In this way, precious metals protect the investor against economic crises.

As a result, this precious metal can be used as an alternative for diversifying investment portfolios and hedging risks.

Note: Even though Gold is an asset well-valued by the market, it is still a commodity and, because of that, its price is controlled by the forces of supply and demand.

Should I buy Precious Metals in their Paper or physical Form?

Investing in the paper or physical form of precious metals both has its advantage and disadvantage.

On one hand, physical gold such as Gold Coins and Gold Bars gives investors possession and ownership title over their gold assets.  However, the expenses from its storage, transportation, insurance, and security commissions can make maintaining this form of physical metal more expensive.

On the other hand, paper commodities such as Future contracts, Gold Stocks, and Exchange Traded Funds (ETFs) are more liquid (easy to sell) and cost-effective compared to other forms of precious metals. However, they are unback by physical metal and do not grant ownership title to investors. Also, Investors are at risk of becoming unsecured creditors in cases where an issuer defaults.

Where Are My Precious Metals Stored?

Generally, most precious metals (physical and ETFs) are usually stored at bullion banks to avoid the risk of theft and damages (physical). There are also many reputable storage providers where you can securely store your precious metals.

If you choose to store your precious metals with storage providers, ensure that they have proper insurance coverage against losses. This method allows you to have the security of owning physical gold while having the convenience of not having to store it yourself.

Which Precious Metals Should I invest in?

While there are many precious metals (Gold, Silver, Platinum, and Palladium) to choose from, Gold and Silver remain the most popular.

Amongst other precious metals, Gold’s value remains unrivaled as a great way to hedge against inflation and economic uncertainty. One backdrop with gold however is its expensive nature. Most Gold bars or Gold Coins are more expensive to invest in compared to silver, platinum, and palladium.

Silver proffers an affordable option in precious metal investment. While retaining its importance as a haven and a hedging asset against inflation. However, its volatility cannot be overlook when dealing with this precious metal.

If you have a tight budget, investing in Silver is recommendable so long as you also factor in its high volatility. Platinum and Palladium are also cheaper alternatives.

What is the best way to buy gold bars?

You can buy gold bars in several ways: through an online dealer such as TRB BULLION, or even through a local dealer or collector. A pawnshop can also sell gold.

Note the spot price of gold – the price right now on the market – when you buy, so you can make a fair deal.

Summary

Investing in precious metals is an excellent long-term investment strategy that can protect you from inflation and other investment risks. However, depending on the metal you choose, precious metal can be an expensive asset to invest in. This is why you should always understand the type of precious metal you are investing in as well as the costs associated with such metal.

 

TRB Bullion offers you the possibility of investing in precious metals at the best prices available online. We also offer secured storage for your gold for only a few dollars a month!