Precious metals like gold and silver can serve as great investments with several compelling benefits. They don’t only help to diversify your portfolio; they also offer protection against inflation and act as easy-to-liquidate assets when you need fast access to cash.
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Portfolio diversification
When you spread your investments across different types of assets, including metals, you can minimise the overall risk to your portfolio and boost its stability. These two metals, in particular, have historically had a low correlation with traditional bonds and stocks. This simply means that when financial markets experience times of volatility or downturn, the prices of gold or silver typically move independently of these factors. Oftentimes, prices may even shoot up as people prefer to bet their money on metals.
Hedge against inflation
Inflation can quickly erode the value of paper money since it can be literally printed in unlimited quantities. However, metals are finite assets, which contributes to their intrinsic value and helps them to retain their purchasing power over longer periods of time. In fact, their value often rises when the cost of living also increases, so they can be effectively used to hedge against inflation.
Safe-haven assets
Silver and gold are globally recognised and valued, so they are often considered as safe-haven assets during times of geopolitical tensions, economic instability, and market downturns. Investors see these metals as being able to preserve their wealth when their other investments may be under stress.
Industrial demand
While gold is usually considered as a metal uniquely suited for jewellery, coins, or bars, silver is crucial for many industries, such as electronics, medical equipment, solar panels, and batteries. As more industries adopt green energy initiatives, the demand for silver is predicted to grow in the future.
How do you invest in gold and silver?
- Purchasing physical billions in the shape of coins or bars is often the easiest way to start on your investment journey. Just keep in mind that you’re going to need a secure place for storing your assets as well as the right insurance policy to cover you in cases of loss or theft.
- You can invest in exchange-traded funds (ETFs) that track the metals’ prices without requiring physical ownership of the assets.
- You can also put your money in mining stocks and invest in companies that mine these metals.
- Some countries offer sovereign gold bonds, which are backed by their governments, so you may wish to look into these instruments, too.
One thing that you always need to remember is that though investing in precious metals can be less volatile than putting your money in the stock market, it’s still not completely risk-free. So, it’s a good idea to work with a financial adviser who can guide you in determining the right mix of assets for your portfolio. Having a professional consultant is always advisable, especially if you’re new to this type of investment.
If you want to start investing, then check out the many offerings on the Jaggards website today!
