How to Get Started in Precious Metals Investing: A Guide for Beginners
Rhodium holds the title as the most expensive metal in the world, coming in at about $260 per gram, as of 2020. You’ve heard of investing in stocks, mutual funds, bonds, and even cryptocurrency. But have you heard about investing in precious metals like gold, silver, and the likes?
If other investment options haven’t worked for you, it’s high time you add precious metals investing to your investment portfolio. When you play your cards right, you’ll make a serious killing when you invest in precious metals.
Are you looking to invest in precious metals but don’t know where to start? If so, worry not; we’re here to help. Today, we’ll be looking at how you can start investing in precious metals and rake in the big bucks.
What Are Precious Metals?
There’s a reason why gold costs so much more than iron, and it’s not because it’s shiny. Gold and other metals are super rare, which makes them cost a lot more than other common metals. Precious metals are rare, hard-to-find metals that fetch high prices and act as investment commodities.
A few examples of precious metals include:
There are multiple precious metals available today. Typically, the rarer a metal is, the more expensive or more precious it is.
How to Start Investing in Precious Metals
Precious metals are excellent to invest in because they’re commodities. Unlike other types of investments, commodities are less volatile and remain stable even after major world events. This relative stability makes them an ideal investment option, even for first-time investors.
So how do you start investing in precious metals?
Understand Your Options
Before you get to the numbers, you first have to get a clear idea of the metals you can invest in. When it comes to precious metal investing, your options boil down to these metals:
While gold is a luxury item, it has tons of practical applications and is found in most, if not all, electronic devices. Gold is one of the most popular precious metals to invest in, with considerable returns.
Gold might be a little too pricey for some investors but it’s worth a shot. You can check out the top 10 gold coins to invest in and see if they work for you.
If you can’t afford gold, then silver is a more economically feasible option. Like gold, silver has tons of applications in tech and medicine. It’s a great way to kick off your precious metal investment.
Platinum is among the lesser-known precious metals but is still worth your investment. It’s much rarer than gold and silver, making it pretty pricey. Plus, its price keeps getting higher and higher as the years go by.
Palladium is even rarer than platinum, making it the most expensive of the bunch. You’ll typically find it in catalytic converters, jewelry, and electronics. If you have deep pockets, consider investing in palladium.
Most people overlook copper as a precious metal because it’s not as flashy as other precious metals. However, copper can be a good investment, especially if you’re new to precious metal investing. Copper is a staple for all electronics, and with heavy digitization, copper prices keep showing an upward trajectory.
Ways to Invest in Precious Metals
There are many ways to invest in precious metals, so you need to find one that works for your specific needs. Here are a few ways you can start your precious metal investing.
An exchange-traded fund, or ETF, is a type of fund that you can trade the way you would with stock. You can think of EFTs as a basket of commodities, like a mutual fund. You can invest in EFTs in multiple ways, depending on your preference.
There are gold, silver, and platinum EFTs that you can add to your investment portfolio. If you’re having trouble picking an EFT, you can use online EFT screeners. EFT screeners help you filter EFTs to only those that meet your specific criteria.
Pros of EFTs
EFTs are a great way to invest in precious metals like gold, silver, and the like. Here are a few advantages of EFTs:
- They are easy to trade
- You can invest any amount you want to
- Unmatched liquidity
Most people choose to invest in EFTs because they’re straightforward and convenient.
Cons of EFTs
Despite the benefits, EFTs aren’t without their downsides. Some cons of EFTs include:-
- They aren’t tangible
- You stand losing everything if the company holding your EFT goes bankrupt
EFTs are among the easiest ways to invest in precious metals. However, you need to invest in the right EFTs for your internet to translate into solid gains.
Bullion is where you buy and hold on to the actual precious metal. For instance, if you decide to invest in gold, it means buying actual gold bars or gold coins. When gold prices increase, you can sell your gold and make a profit.
Pros of Bullion
Here are a few advantages of investing in bullion bars or coins:
- It’s easy to transfer
- Most people love seeing and holding their precious metal investments
- You can purchase it for whatever amount you wish to
These are a few advantages of investing in physical precious metals. Bullion also gives you a solid sense of ownership, which is always great to have.
Cons of Bullion
Investing in tangible forms of precious metals has its cons. Some of them include:
- You require tight security to safeguard your investment
- Investors must pay tax if they hold bullion for more than a specific period
Buying bullion is an excellent way to invest in precious metals, but make sure you keep it safe. You could lose all your investments in a flash in the event of a robbery. Also, keep a keen eye on taxes, especially if you’re investing for the long haul.
Apart from bullion and EFTs, you can also invest in precious metals through:
IRAs: Channels some of your retirement money to precious metal investments
Futures and options: Etches on the future of precious metal trends and is about risking your money on a precious metal
Precious Metals Investing Made Easy
The above information should put you on the right track when starting your precious metals investing. For the best results, remember to do your homework before investing any money in precious metals.
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