Is Physical Gold and Silver a Good Investment?
Your answer to this question depends entirely on your investment needs and goals. Let’s consider both physical gold and silver investments and stocks as investment vehicles.
Investors purchasing bullion have the option to store their precious metal bars and coins with either a dealer or in their own private safe. Doing so incurs both an upfront cost for storage and potential insurance fees.
No counterparty risk
Gold and silver are real physical assets with known market prices, unlike investments such as stocks or bonds which may involve counterparty risk due to corporations defaulting on debt payments, or derivative financial instruments with no tangible foundation such as options and futures contracts.
Gold provides intrinsic value that makes it a solid store of wealth during times of economic volatility, while also acting as an inflation hedge as its price tends to rise when inflation reduces the purchasing power of fiat currencies.
Many investors choose exchange-traded funds (ETFs) as an efficient means of investing in precious metals, since ETFs store the metals for the investor at less cost than buying physical precious metals directly. Unfortunately, however, this does not eliminate counterparty risk since its operator will still be responsible for handling and storing these assets.
Investors should always seek advice from an investment expert before investing in gold and silver, including fees associated with opening an investment account, as well as capabilities among different companies (for instance, some dealers charge higher commission rates when buying and selling precious metals).
No liquidity risk
As an economic crisis approaches, physical gold and silver coins and bars provide peace of mind in terms of being easily accessible in case they’re needed for redemption – which is why many savvy investors opt for them over ETFs or paper assets.
American Bullion provides secure transactions that allow you to buy tangible assets quickly and safely, directly at your doorstep or safe deposit box. That means you can protect any excess funds outside your retirement account while diversifying your investment portfolio with real-world assets that provide protection from market volatility and other forms of risk.
Investor Implication: Silver can be more volatile than gold when it comes to price fluctuations; nonetheless, its daily fluctuations still present significant fluctuations on up and down days. Therefore, it’s crucial that before making an investment decision in physical silver that you understand exactly what is being purchased and have found a dealer offering accurate spot prices.
Silver has many more practical uses than gold; about half its total supply goes towards industrial applications. From batteries and solar panels to automobile electrical systems and medical devices, almost everything contains silver – which makes it an effective indicator of economic trends and an ideal hedge against stock market crashes.
No illiquidity risk
Gold and silver investments can provide an insulating buffer from economic turmoil in times of global uncertainty, as their demand increases significantly and price gains can become significant. But investors must be wary of potential risks associated with precious metal investments before proceeding.
One of the major risks when investing in precious metals is liquidity, or its ease of conversion into cash. To minimize delays or pricing discrepancies when selling them later on, it is wise to find a trustworthy third-party custodian to store and vault your precious metals safely.
Physical gold and silver investments can be an excellent way to diversify your portfolio, as they tend not to experience market fluctuations as often. Furthermore, their portability and easy liquidation means they’re an easy and hassle-free investment option that you could quickly sell should necessary.
Physical gold and silver can be purchased directly from a bullion dealer such as American Bullion. We have shown thousands of clients how they can add physical precious metals to their portfolio through direct delivery services like us. Reach out now and discover more!
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