Should I Invest My Money in Gold Or Silver?
Gold and silver are recognized as precious metals, making them attractive as forms of protection against economic uncertainty.
Precious metals tend to rise during times of economic stability and growth, making precious metals an excellent way to meet long-term financial goals.
Investing in Gold
Gold can be an attractive investment during times of financial volatility. Its properties help mitigate portfolio risk and may make for an excellent addition to a diversified investment portfolio.
Before investing in gold, however, there are a number of key things to keep in mind. First and foremost is finding a reputable dealer; investors could fall victim to scammers inflating product values or employing persuasion tactics in an effort to convince investors to purchase.
Compare prices among dealers before making your choice. The cost of buying and selling gold can be high; dealers usually add an additional premium onto the spot price (the current market value of gold) in order to cover manufacturing and distribution fees.
Storage should also be an issue; without enough room, keeping thousands of dollars worth of gold could prove challenging at home. Professional storage options exist, though these incur costs and introduce risks that should be discussed with a qualified financial advisor prior to any large investments in precious metals.
Investing in Silver
Silver can serve as a reliable hedge against systemic risks that threaten the global financial system, including bank failures, runaway inflation, government debt and deficits, technological risk exposures, speculative financial instruments and trade wars.
Silver offers an alternative to cash during times of economic difficulty, being less costly per ounce and offering industrial applications in today’s economy.
As with gold, investors can purchase physical silver coins and bullion (keeping in mind you’ll need somewhere secure to store it), invest via futures contracts or ETFs or even open a Silver IRA to invest in physical silver and other commodities.
To better understand how silver or gold could fit into your portfolio, reach out to a financial advisor. SmartAsset’s free tool connects you with pre-vetted advisors near your location who are equipped to discuss your individual situation and answer any queries that arise.
Investing in Bullion
Attracting investors, gold or silver in physical form holds many appeals; however, its storage and transport can be challenging and you are completely reliant on price increases in precious metals – as with buying stocks on an exchange. Furthermore, buying physical gold or silver exposes you to price fluctuations similar to the stock market itself.
As an alternative, consider investing in gold or silver mining companies instead of bullion. They are less risky than bullion purchases and may provide dividends that help diversify your portfolio with more reliable assets. Just keep in mind that precious metals remain volatile; thus it should make up no more than 10% of your overall portfolio. Talking with a financial advisor may help determine if adding precious metals is smart for your savings profile and medium-term goals; use SmartAsset’s free tool to connect with vetted advisors in your area – then interview process is completely free so you can select advisor best suited for your savings profile and medium-term goals!
Investing in Precious Metals
Precious metals provide a safe haven and protection from inflation and paper fiat currencies devaluing, as well as acting as countercyclical assets to stabilize and expand your portfolio during recessions.
Selecting precious metals as investments is a smart move, but which metal suits your goals and risk tolerance best depends on several factors. Gold has proven its wealth-preservation capability while silver offers lower upfront costs per ounce along with numerous industrial uses.
At first, allocating 10% of your portfolio to precious metals may be sufficient. But, as economic uncertainty and geopolitical risk increase, you may want to increase this percentage as an insurance against economic catastrophe. When investing in precious metals, be sure to work with reliable sellers who provide documentation of purity and value; doing so can protect against fraud and identity theft.
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