Buying precious metals is a way to invest in the market, or buy tangible assets. You have many options at your disposal when you decide to go into the precious metals market. As a new investor, it gives you a great way to start your portfolio, or you can diversify your portfolio if you have been investing for a while. The options range from buying the physical form of precious metals, like bullion bars or coins, or with other methods, like stocks, funds, options, futures, or Exchange Traded Funds (ETFs). What you decide to go with depends on a number of factors, such as the current price, if you have a safe place to store bullion, and your own personal preferences as an investor.
Precious Metals a Safe Investment
Looking back, the economy has been hit hard over the past decade. When the economy is hit, the stock market suffers considerably. It all started with the mortgage crisis and recession starting in 2007, and continued through 2008 during a worldwide, global financial crisis. During this time, there was a major stock market crash that affected millions of people who were investing at the time. So, it’s not surprising that investors are looking for more of a safer bet. Precious metals as a whole are a safer alternative to many other options for investing. With the physical form of bullion of precious metals, you have the unique benefit of being able to hold onto it until the prices go back up, then selling. It is considered more of a long-term investment plan. Though even with stocks or futures, you still are getting a stable investment. The majority of prices of precious metals in 2014 are looking at a stable rise, providing even more opportunities for investors.
Precious Metals Investment Strategies
There are currently five primary types of investment strategies available for precious metals. These all include a variety of metals, including gold, silver, platinum, palladium, and rhodium. In a struggling economy, these five options are the safest bet for 2014 precious metal investing.
- Bullion – The first investment strategy in precious metals is with bullion. Bullion is a “bulk” type of a precious metal which is made from the liquefied version of the metal of choice. It may be in a bar, coin or other shape, those these are the most common. Internationally, bullion precious metals are the most popular independent investor assets. You can get bullion in any of the precious metals, and in a variety of sizes and purities. Because you hold possession of the metals, you need to have a secure place for storing it.
- Certificates – Next, you can have a certificate. This is the best alternative to having the bullion as a physical investment. Certificates show that you have ownership of precious metals in their raw form, but without having to store them on your own. It is a very low risk way to invest in precious metals.
- Exchange-Traded Funds (ETFs) – There are different exchange platforms offering ETFs in the precious metals market, including the SPDR Gold Shares ETF and the iShares Silver Trust ETF. In both cases, you will be looking at the prices of precious metals, buying and selling at the right time.
- Stocks and Funds – Stocks and mutual funds are available in mining of precious metals, so you are still investing in the precious metals market. The mining shares let you work off of the different price shifts in the market. If you choose this option, go with those that have an excellent performance records and where they have lower fees.
- Futures and Options – Finally, there is the most risky of all investment option for precious metals, which are with futures and options. While it holds the biggest risk, it also has the highest potential for profit. You really need to be aware of market pricing shifts of precious metals on the New York Mercantile Exchange to make it worth it.