Making the decision to start investing in precious metals is a smart one, but it is only the first step. Direct investment in precious metals like gold, silver and platinum is also recommended as these have always been considered safe investments. Gold has appreciated by a whopping 49% in the last one year. Gold coins and biscuits are preferred over jewelry.
All of these products give you the opportunity to leverage’ your investment. In other words, you can borrow to boost the size of your bet. That will boost your profits if the gold price goes in the right direction, but it can also increase your losses if things go wrong. You could end up losing all of your original investment, or potentially a sum greater than your original investment.
Gold is of course the king when it comes to these markets. It is recognized as one of the most secure stores of value in any asset you can invest in. The reasons behind it being a safe haven in times of economic strife stem largely from the fact that the gold market is not impacted in the same way by supply and demand as many other assets. Sure, it has many practical applications within industry, and of course jewelry, the existing mined supply though greatly exceeds the new supply being mined.
If you have a brokerage account in which you trade stocks, you can trade an ETF for silver, such as the iShares Silver Trust (NYSE:Â SLV), or the ETFS Silver Trust (NYSE: SIVR). Buying and selling these products allows you to participate in the price movement of silver without actually getting a piece of metal, which is much more convenient for many investors.
If you like the profit potential of gold mining stocks, but don’t want to buy individual companies, you can invest in gold funds instead. A fund will allow you to invest in the shares of many different gold mining companies, which will reduce the risk of holding just one or two companies, or the cost of holding many.