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Chris Bell

5 Advantages of Investing in Precious Metals



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Once you see a surplus in your budget, you might feel exhilarated at first, only to realize that you now have an important decision to make. This decision is – what to do with all this money? On the one hand, there are plenty of options but with so many to choose from, it seems even harder to make the right decision. One of the ideas to bear in mind is investing in precious metals, which is probably not the first idea that popped in your head when you first started thinking about investing. Still, there are more than a few good reasons to do so and here are five of them.

1.    Diversifying portfolio

In theory, the most profitable course of action would be for you to find one good investment and place all your money there. The problem with this idea lies in the fact that no investment is 100 percent reliable, which means that you’ll be putting yourself in a lot of unnecessary danger. After all, hoping for such a thing is a mindset that belongs to a gambler, not an investor or a businessperson. However, investing in various stocks isn’t that safe either, seeing as how a marketplace crash could endanger all of your investments at the same time. This is why investing 5, 10 or 20 percent of your assets in precious metals helps you diversify your portfolio.

2.    They abide by different rules

The reason why investing in precious metals is safer is that in the moments of crisis, people start losing trust in currencies in organizations. This makes currencies and stocks drop in value. As a last resort, people start investing in commodities, which means that their price grows. This is where the full genius of your plan comes to life. You see, if you put some of your money in stocks and some of it in precious metals, you’re bound to gain value on one end, even if you start losing it someplace else. Seeing as how the market for these investments usually moves in separate directions, by covering multiple options, you’ll be a lot safer.

3.    Options to choose from

One of the biggest misconceptions about investing in precious metals lies in the idea that you’re restricted to gold or silver. This is of course as far from the truth as it gets. More and more people nowadays seem to be investing in platinum. This metal is used in the jewelry manufacturing industry but it also has wide use in the field of emission control. With the environmentalist movement gaining momentum, it’s safe to assume that this metal will get into even greater demand. This is why it might be a good idea to acquire the supply as soon as possible. Other than platinum, you could also give palladium a chance. Lastly, even though it’s not a precious metal, investing in diamonds might also be a solid plan.

4.    Harder to make an estimate of your wealth

There is one factor that not a lot of people are taking into an account and that’s the fact that investing in precious metals makes your wealth harder to estimate. This can be quite handy for more than several reasons. While it may take just several seconds for someone to check how much money you have in an account, no one knows how much gold, silver or platinum you have in your safe (or even buried in your backyard). Knowledge is power and no good can come from others being able to make an easy guess of your net worth. This is a private matter, which means that secrecy is always a huge plus.

5.    Preparing for the worse

In one of the previous sections, we’ve mentioned that precious metals abide by different rules. However, it might be even better to briefly reflect on all the scenarios in which you might be glad that you’ve chosen to buy coins and bullion instead of bonds and stocks. Rampant inflation often makes people flock towards buying gold, same as war or political crisis. In the world that’s politically unstable (Middle East crisis, US-China trade war, Brexit, etc.) chances are that there’s a disaster of epic proportions looming in the air. There’s nothing bad about wanting to prepare yourself for the worst.

Conclusion

At the end of the day, just because you have a surplus, it doesn’t mean that you should rush to make an investment. Pay off a loan, refill your emergency fund or even treat yourself with that money. Once you do decide to invest, however, you should pay serious consideration to precious metals.