Precious metal investments are any investment in gold, silver, platinum, or any other metal considered precious. But are they valuable from an investment point of view? Gold, silver and other precious metals have long served as a store of value. Especially in the case of gold, these metals have historically served as a hedge against inflation. In times of economic instability, precious metals can be a good asset to consider for your investment portfolio.
For those looking to invest in gold, a Gold IRA broker can provide guidance and assistance in setting up a gold IRA account. In addition, alternative assets, such as precious metals and real estate, provide a level of diversification compared to more traditional stocks and bonds. If you're interested in taking risks to generate aggressive growth, precious metals won't make you float. As long as the metals aren't stored in an IRA or other retirement plan, you can store them yourself. Despite all the benefits of gold and silver mutual funds, there are still risks and potential drawbacks.
Investing in gold, silver and other precious metals could be a good way to increase the diversification of your portfolio. ETFs offer investors a way to buy an investment that tracks the price of gold, silver, or other precious metals without having to directly own or store the physical metal. However, because precious metal prices are so volatile, most experts recommend allocating only two to 10 percent of your total portfolio to precious metals mutual funds. If you're investing in a precious metals mutual fund, your investments also increase, so a precious metals investment fund is a good decision.
Most conventional IRA and retirement account depositors don't allow you to keep precious metals in a retirement account, so you may need to open a self-managed retirement account or a gold IRA. Precious metals have been used as investments throughout history and for several interesting reasons. Like all precious metals, gold has a history of keeping up with or exceeding inflation, and the metal's returns over time may surprise you. In addition, funds may charge fees or penalties for withdrawing money before a certain period, which can harm your investments if the precious metals market changes before you can withdraw.
There is no risk that the company you entrusted your investment to will make a mistake on your part because you are in possession of the metal itself. Short-term metal traders could benefit from this volatility if they “bet directly” on the direction of price fluctuations. These and other ETFs that track gold, silver and other precious metals can be traded during the hours when the stock market is open, just like any other ETF. If you're not comfortable deciding on your own precious metals allocation, consider talking to a financial advisor.
The virtues of precious metals make them a strong candidate for assigning safe havens in many portfolios.