The longest lasting and most stable commodity in history has been investing in precious metals. No other element or venture has seen the accumulation of wealth like gold and silver. Societies have fallen, trends have come and gone, economies have crumbled; yet the value of precious metals has never wavered. It’s a solid investment and will likely still be a thousand years from now.
Like any other financial venture, even the most proven commodity is subject to market investment trends. What makes this financial instrument stand out though is it’s not a victim of economic factors. As this has become more obvious, the allure of investment in precious metals like gold has grown. Financial advisers have suggested any investment portfolio and long term investment strategy should consist of at least a 10 percent portion in precious metals.
Investing in the likes of gold and silver has seen renewed attention since the most recent Tsunami in India. It’s debated that the interest was there before that, after the series of hurricanes that hit the Gulf Coast. Like a lot of other factors, natural disasters can have a dramatic effect on the economy. It’s during these periods that the investment market can falter. Investors will reconsider having their monies in the market and banks.
Historically, whenever the U.S. dollar showed signs of weakness, especially to international markets, the price of silver and gold went on the up rise. More and more investors are taking into account that purchasing precious metals is a safe medium, as its value will not be affected by typical outside elements.
Even as the economy appears to have steadied, recovering from natural disasters and threats of national debt, a trend of upward mobility continues in precious metals trading. It’s been theorized smart investors are preparing for a future of uncertainty, seeing precious metals as a sound strategy.
Though trends have seen precious metal drop in value in the past, there has always been a steady price and long-term recovery. With so many of us watching our retirement funds dwindle, we’re looking to build portfolio packages that will sustain our families and us over the long run. Investment in precious metals is definitely a solid choice. It should be done with strategy and foreknowledge.
The best advice is to find an experienced consultant or investor that has a good ear to the market. Chances are you’ll make a mistake or two when you step into the water, but that’s part of the game. Yet, you might avoid the worst of these with professional guidance. The Internet is actually a great foundation for exploring the market and getting an understanding of the different strategies for precious metals investments. It’s also an exemplary resource for finding a good investment adviser.
If investing in preparation for economic woes, the best avenue is in the trading of bullion coins. These pieces are minted from precious metals like gold and silver. These instruments are then bought from coin dealers, major banks, brokerage firms and other precious metals dealers. The value is based on the bullion content. Among the more popular are the Canadian Maple Leaf, the American Gold Eagle, the South African Krugerrand and the Australian Gold Nugget.
Investing in coins is a big decision and will require a lot of attention if you plan on turning it into more than a casual hobby. Hobbyists collect these rare coins out of sentiment and history. Investors do so with an understanding there will be a return at some point. If you should decide to look further into this market, do as much research as you can and seriously consider having a financial advisor with a solid reputation in the field to lean on for advice.
Here are a few things to keep in mind as you move forward.
- Always get an independent appraisal of any asset. The seller is likely to inflate the value.
- Shop around. Entering the name of a coin into a search engine can reveal if you’re getting a comparable deal. You can do the same to get information about any company or dealer.
- Factor additional costs into the investment. Insurance, a safe deposit box or off-site storage may be needed to protect your investment.
- Never allow yourself to be pressured into a purchase. Any seller that insists this is the opportunity of a lifetime should be shunned. Reputable dealers sell coins, not change lives.
- Steer clear of telemarketers and the “mint” coins they promote. They are sold for far more than their worth. Also, coins that are mass marketed rarely increase in value. You should avoid promotions through snail or email. Serious dealers don’t have time for that.
- Only deal with companies and dealers with a history and reputation in the numismatic field. Your state’s consumer protection agency or Attorney General can provide you with information.
- Always get a certificate or guarantee that authenticates the bullion’s precious metal content. If you’re dealing with a broker that you’ve already investigated, you won’t have to worry about how easy it is to fake these documents.
It cannot be stressed enough how important it is to have a trusted resource like Monex Precious Metals working with you. This is particularly critical in the fast growing world of online coin collecting. As it expands, so does the possibility of fraud and misrepresentation. With the surety of precious metals as an investment, it’s susceptible to any number of get rich quick schemes. Taking advantage of any positive resource available would only be beneficial to you and your portfolio.
Precious Metals Investing
While trading in precious metal coins is a safe way to start investing in this commodity, the purchase of silver, gold, bullion, palladium, rhodium, platinum and other precious metals will always be a sound undertaking. Approach it with the same caution you would any other financial or business opportunity. Determine who you are and how your style fits the market and any goals. Study proven strategies to help manage risk and aid in understanding the types of investment you can engage in with minimal risk to your financial situation.
Here are a few things to consider about the market and yourself before diving into the world of precious metals trading.
- How much financial risk are you willing to put on the line?
- At what point or what circumstance would prompt you to get out of the market?
- What is your general overview for approaching the concept? Bearish? Bullish?
- Will this be a focused effort or part of a larger portfolio consisting of options, futures, stocks, etc.? Be aware of the possibility of spreading yourself thin.
- What will you do if your position changes for the worst? Hang in there or get out?
- What factors will determine when to enter a trade?
Working with a Broker
Tread carefully in your search. Unless you get a recommendation from a trusted family member, friend or colleague or know someone already familiar with precious metals investing, you’ll have to do thorough research to ensure you partner with an advisor that has your best interests and portfolio at heart. There are many that never forget they get their commission no matter what happens to your investment.
Look for someone with experience in the field. They should have no less than three years experience in precious metals trading as that’s more than enough time to truly get a firm grip on the market’s up and downs. If your plan is to specialize in a specific area of investment, make sure the broker is in line with your vision. Some have a firm understanding of precious metals, but others might have a greater hold on grains or currencies. If you’re looking at gold, they should have a solid knowledge of that market.
Get a list of satisfied clients and then go looking for complaints with the Better Business Bureau, the State Attorney General and any consumer advocacy group in the area. See if they have a track record for discretionary trading. Find out what the commissions and fees are and what services come with them. What type of accounts do they handle and which one best suits your purposes.
Most importantly, question how concerns and disputes are dealt with. Will the person you’re talking to be handling your business or will it get pawned off to an associate fresh from passing their road test?
Investing in precious metals is a great hedge in preparation of economic strife. Before you start though, get as much detailed information about the market as you can. Give a trusted resource like Monex Precious Metals a call. An established organization like this can provide the basic principles for investing in the likes of silver and gold, offering concise insights and facts on the best way to begin investing. Precious metals are a sound solution for anyone willing to put in the work, patience and commitment.