Good Reasons to Own Precious Metals Now
- Precious metals have been a solid hedge against declining U.S. dollar
- Precious metals have been a proven safe-haven in times of war, political strife, and uncertainty
- Precious metals can offer outstanding price appreciation and profit potential
- Preservation of buying power
- Financial insurance position
Bullion’s value is intrinsic. Precious metals cannot be destroyed or altered. These “noble metals” are highly liquid and have few geographic boundaries and for this reason can be bought or sold throughout the world. Gold is first and foremost a monetary metal that does very well during times of economic uncertainty. Precious metals offer investor’s insurance against extreme volatility in the price of other asset classes such as stocks, bonds, real-estate, and savings. With today’s economics, gold and silver maintain favor with investors and upholds its pedigree as a protection in the economic storms. Precious metals are a foundation asset class in a long-term investment portfolio. A number of compelling reasons validate the widespread renewal of interest in gold and silver in an asset class:
Ways to Invest in Gold, Silver, and other Precious Metals
Growing ranges of methods now allow investors to either buy gold and silver, or simply gain exposure to gold and silver price movements. From bullion coins, numismatic coins, online accounts, exchange traded funds and complex financial products, to mining stocks; the most appropriate gold investments will depend upon the investor’s specific requirements and outlook. Here is a little more detail on the landscape of opportunity.
Bullion is gold, silver, platinum, and palladium typically purchased in coin or bar form. Many bullion products are legal tender and created by various mints of the world. Bullion is different than rare (numismatic) coins since the majority of the value of the product is based on the intrinsic value and weight of the metal in which it is formed from. Bullion products are my preference since they offer the most metal for the price.
Unlike bullion product, numismatic products are rare and valued because of their beauty, rarity, design, and quality. These products are valued over and above the intrinsic value of the metal in which it is formed from. There are considerations that I warn investors in regards to rare coins. This avenue is usually the most common way people get taken advantage of in the marketplace. There are advocates for numismatic investing which recommend owning rare coins due to the potential of government confiscation, as seen in 1933.
In 1997, the Tax Payer Relief Act was passed. This act allowed investors to select specific precious metals to be included in an individual retirement account. There s a list of products available for this on noblemining.com. This opportunity has found favor with many Americans. The only drawback is that you cannot have physical possession of the asset, since it must be stored and managed by a custodian.
Exchange Traded Funds (ETF’S)
Exchange Traded Funds (ETF’s) are investment funds traded on the world’s stock exchanges. An ETF can hold assets such as stocks, bonds, or commodities and attempt to trade at approximately the same prices as the net asset value of the underlying assets. The gold ETF-GLD and the silver ETF SLV are very popular vehicles that allow one to capitalize on movements of the metals, without logistical and transactional costs. The ETF’s are not designed for an investor that would like physical delivery.
Gold Mining Stocks
These are publically traded equities, which allows an investor to participate as a shareholder in the business of mining precious metals. There are more factors such as: management, reserves, hedging, efficiencies, political, fuel costs, and myriad of other business realities that can make a business successful or not without respect to the various asset values the business is mining. There are opportunities in this market for the investor that is willing to do the homework and choose a stock or investment that has a Golden Opportunity. Please see the section where we highlight such opportunities.