Although precious metals like gold and silver are considered an old-fashioned approach to investing, in reality, these old storehouses of wealth do play an important role in a modern portfolio. An ounce of silver or gold has the same recognized value globally, which makes these metals easy to trade. This article outlines why you should invest in these two precious metals and should act as a guide to investing in gold and silver.
Today, many people are asking themselves “should I invest in gold or silver?” After the two world wars and the great depression, many Europeans were exposed to the horror of losing all their wealth in a crisis. As a result, they have always been more open to storing part of their wealth in form of precious metals.
Since the U.S. has never experienced a severe crisis, other than the 2008/2009 recession and mortgage crisis, demand for gold and silver in the region is lower compared to Asia and Europe. However, in the last decade, a long-term trend of investing in silver and gold has steadily been on the rise in the U.S. More and more Americans want to invest in gold and silver because they realize the importance of holding these precious metals.
What are Physical Metals?
Physical metals refer to actual precious metals (in form of coins, bullion, bars, or jewelry) purchased by an individual and delivered to them. Therefore, the investor is free to trade or sell these items. No third party establishment or individual has access to these metals as in the case of exchange-traded funds (ETFs). The investor is free to store their bullion at any location they want.
Why Should You Invest in Silver or Gold
Physical gold and silver add security to a portfolio. Since there is a limited amount of these precious metals in the world, their relative purchasing power remains stable even during harsh periods of inflation. What’s more, since the prices of precious metals move independent of stock market prices, they are perfect investments to make when you want to balance your portfolio.
Another reason to start buying gold and silver bullion is the need to protect yourself against inflation risk. It is a no-brainer that higher interest rates eventually lead to inflation, which causes an increase in commodity prices. Since the economic recession of 2008/2009, inflation has slowly been rising with mortgage rates approaching five percent.
Gold and silver investing also make sense when you are looking for a stable investment that is independent of bonds and stocks, and that will protect your long-term purchasing power. As a small-scale investor seeking to invest your money in long-term assets, gold is a perfect investment to add to your portfolio.
Physical metals can have an intrinsic value to their owner, and thus they are a suitable means of passing on wealth for generations. Subsequent recipients of these metals come to realize and appreciate the value of their inherited wealth.
Today, gold and silver are two of the most coveted physical resources globally. People have, for centuries, been attracted to gold’s quasi-indestructibility. Gold is an excellent asset to use for hedging against inflation, as a store of value, and for asset preservation in times of economic or political turmoil. On the other hand, silver has industrial applications. It is the most reflective, thermally conductive, and electrically conductive metal on earth with no close substitute.
The amount of investment-grade gold and silver demanded in the future will eventually outweigh supply since these metals have a relatively finite supply.
The great thing about investing in silver or gold is that there is no wrong reason or time to get started. These two precious metals will always have value, are a good store of wealth, hedge against risky stock market investments, protect against inflation risk, and have intrinsic value. Call us or visit our website today for more information about how to invest in gold and silver.