Many people who consider themselves savvy investors have little or no direct experience with alternative investments, such as precious metals. The reasons for that are diverse and plentiful, but some of the more common are: risk aversion due to the complexity of the subject; price fluctuation; and a limited knowledge of the role that precious metals can play in a balanced portfolio.
Precious metals, which include gold, silver, platinum and palladium, are primarily used as an investment to offset risk and serve as a hedge against inflation. One typically owns other investment assets in a complete portfolio. Precious metals are seen as an insurance policy for your overall assets, because the price of both primary precious metals – gold and silver –typically moves inversely to the economy. If the stock market is up, gold and silver are usually down a notch. But when the stock market crashes, precious metals take on a whole new luster, as we plainly saw during the Great Recession.
Since this article’s original June 9, 2015 publication, all four precious metals have seen either stable prices or gains: gold is trading at $1,283,80, up 9%; silver and platinum have retained their values, and currently trade at $15.1 and $844, respectively; and most impressive of all, palladium has doubled, rising 107% to $1,546.
With that in mind, here are the 5 “do’s” and 4 “don’ts” to know if you are considering investments in precious metals:
The world of precious metals investing can be a complex but very rewarding option for savvy investors. Like anything else in the world of investments, do your due diligence and apply common sense, and you’ll be on your way to a truly balanced portfolio.
[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinars: Alternative Assets Part 2: Investing in Real Estate and Other ‘Hard’ Assets.]
Then sign up to receive our weekly Financial Poise newsletter, our take on the most relevant and topical business, financial and legal issues affecting investors and small business owners.
Always Plain English. Always Objective. Always FREE.
Executive vice president forÊDillon Gage Metals, an international precious metals wholesaler.
The REIT Income for Retirement: 6 Reasons to Invest in REITs
90 Second Lesson – Fees and Carried Interest: Private Equity Sponsor Compensation
Invest Tax-Advantaged Retirement Funds in Private Equity for Growth
90 Second Lesson – Private Equity Sponsor v. Private Equity Fund
The Economic Consequences of 1031 Exchanges: 5 Myths Debunked
The Potential of Hedge Fund Returns: Evaluating Risk and Reward
Please log in again. The login page will open in a new window. After logging in you can close it and return to this page.