In general, the top three most popular precious metal investments are gold, platinum, and silver. In this article, l explore these three categories of precious metal investments, why gold is so popular, why some investments in precious metal are rising while others are falling, and what to watch for when investing in physical precious metal commodities. After reading this article, you should have a better idea about which precious metal investments are right for you and your family. In addition, after learning about the top three precious metal investments
, hopefully you can decide which metal investment to invest in.
Stock Market Exposure
If you like to hedge your stock market exposure, gold investment company memberships
are an excellent hedge against fluctuations in the market because gold typically increases in value over time. Over the last twelve years, gold has become more valuable than any other financial asset besides the U.S. dollar. To get the best results, purchase gold as a bullion and hold for the maximum period of time possible
. However, if you are interested in short-term trading, you can buy or sell stock within the day and have your profits accrue quickly.
US Dollar Weakness Exposed
Precious metals are a great hedge against currency risks
because most countries will eventually have a problem with their money. Therefore, by investing in precious metal investments you can minimize the risk of your investment decreasing in value due to currency fluctuations. For example, the price of gold has declined slightly in recent years due to a weak U.S. dollar
. However, if you invest in the futures market, you can purchase precious metal commodities such as gold at a later date for a higher price. As a result of doing so, you have protected yourself from further decreases in the gold price.
Precious Metal Stocks
Some investors prefer to buy precious metal stocks, bonds, or mutual funds.
Although mutual funds typically invest in stable companies, some prefer to purchase individual stocks. When purchasing a gold mutual fund, however, it is important to research the funds in order to determine their overall investment philosophy
. Most mutual funds focus on growth and income, while others may only invest in metals that will appreciate in value.
One of the best ways to diversify your portfolio is to invest in precious metal investments through both the stock market and futures.
Both markets offer opportunities to diversify your portfolio without having to purchase and sell stock on a constant basis. Because gold and silver prices tend to fluctuate, a small increase in one metal can significantly impact the cost per share of the stock or the overall value of the portfolio. Gold and silver prices are also more closely tied to commodity markets such as oil and gas, which have high profit margins.
Although both stock markets and gold and silver investing
have high levels of risk, they also offer high potential returns.
Other precious metal investments include certificates of deposit (CDs).
Certificates of deposit are similar to savings accounts, except they feature a highly liquid financial product that is tied to
the performance of a particular financial index. For example, one CD might track the performance of the Dow Jones Industrial Average. Another CD might track the performance of the Japanese Yen. Both CDs usually carry interest rates that are highly adjustable and will require no additional fees. Additionally, both types of precious metal certificates of deposit are accessible to investors who have good credit and are able to qualify for a large amount of money
Bullion coins are an excellent choice for any investor seeking to diversify his or her portfolio. Bullion coins are collectible and are usually purchased and sold by coin dealers or online brokerage firms.
Although many people view bullion coins
as a high-risk investment, investing in bullion can be a sound financial decision if done properly. The main advantage of bullion coins is their ability to grow with inflation. Over time, the inflation will make these coins worth more than the original amount.
Secure Your Investments
No matter what type of precious metal investments an investor chooses to pursue, it is important that the investments are monitored and secured
. To help achieve this goal, several companies sell products called "broker" accounts that allow investors to manage their investments via a computerized system. By investing through a broker, investors can have peace of mind knowing that their transactions and balances are kept safe at all times.