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A new year is representative of new beginnings. Whether you’re a beginner or seasoned precious metals investor, this might be the time to re-evaluate your investing goals.
For centuries, precious metals like gold and silver have been a universal, stable source of value. Additional metals like platinum and palladium have come into the fold since then. Investing in precious metal bullion helps you hedge against financial risks like inflation and even economic turmoil.
Having the right knowledge at your side can help when it comes time to make financial decisions. In this article, we’ll go over three tips for investing in precious metals to help start your new year on the right foot.
Tip #1: Stay Informed About Market Fluctuations
Any investment requires that you familiarize yourself with the market in order to make smart decisions and get the best ROI you can. Investing in precious metal bullion is no different; and it comes with a unique market. Investments like stocks perform well when the economy is strong and businesses are profitable. Precious metals tend to move in the opposite direction, gaining value during times of economic downturn and instability. When investors turn away from stocks, they often increase their holdings in precious metals.
Metals are also used by investors to combat inflation. While paper money can lose value over a long stretch of time due to inflation, metals maintain their intrinsic value. Additionally, metals have a host of industrial uses that keeps them in high demand.
Tip #2: Be Prepared for a Long-Term Investment
Investing in precious metals is generally considered a long-term investment, meant to be held for at least five years. Metals can be volatile in the short term, often taking longer to noticeably appreciate in value. However, many investors keep metals in their portfolios to help balance it out, and even as something to pass down to family members. Bear in mind that because metals are often held for years, you’ll have to consider the associated storage costs if you choose to store your collection outside of your home, such as in a depository or bank safety deposit box.
Since investors often buy metals in increments over the years, it’s important to choose to deal with a reputable company that you can trust. Along with selection and good customers service, a good precious metals dealer will also be accredited with the Better Business Bureau. Dealers might also be members of industry organizations like the American Numismatic Association or the Industry Council for Tangible Assets.
Tip #3: Diversify Your Portfolio
One of the top tips that financial professionals will advise you on is to diversify your portfolio to help protect your investments from volatility. A balanced portfolio will contain a mix of cash, stocks, bonds, and of course, precious metals. But like any other investment, balance is key. Overinvesting in any one asset can be risky. Speaking with your financial advisor can help you determine what percent of your portfolio should be dedicated to metals.
Another way to maintain more balance is to invest in a variety of metals. When people hear about precious metals, they immediately think of gold and silver. And while gold and silver are sound investment options, you can also invest in platinum, palladium, copper, and other valuable metals.
Kick Off Your New Year Right
Considering your investment options now is a great way to help yourself work towards your financial goals. You may already be on the right track, or it may be time to step back and reconsider your plan. Either way, now is the time to get you finances in order to help ensure a fantastic 2018 and many more years to come!
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