Precious metals continue to remain an important investment. They help to diversify portfolios and offer stability in a volatile financing market. This is why most people should have at least a small portion of their interests invested in gold, platinum, or silver.
One of the reasons that people may not buy gold, silver, or platinum is because they may not know how to do so. These precious metals, after all, are not considered traditional forms of investment. There are a few ways that you can choose to include these metals in your portfolio:
Commodity Exchange Traded Funds
Commodity exchange traded funds (ETF) are exchange traded funds that invest in tangible commodities such as precious metals. Commodity ETFs work by holding the physical metals in storage or in buying future shares in the commodity at a predetermined price. You can interact with a commodity ETF by buying shares to the fund. The benefit of this method is that you can buy as little shares as you want for a reasonable cost. It also allows an extremely liquid manner in which to buy precious metals. It is usually easier to buy silver and gold through ETFs.
You can also choose to buy stocks and shares in companies that mine these precious metals. These shares are leveraged to the movements and variations in the cost of gold. The valuing of mining stocks can be a complex process and often difficult to understand. If you would like to directly invest in shares of mining companies, it is best to use mutual funds. These funds that have a solid performance rating are typically the best choice.
Bullion refers to the coins and bars of gold. The main problem with buying these physical commodities directly is the storage. Many people find it quite difficult to store the bars and coins as you require a secure environment in which to store them. It is, however, a good option for those who are investing only a smaller amount of money in the yellow metal. For individuals who wish to have a small quantity of gold, coins are their best option. These are small and easy to store. The physical metal can also be a good investment if the economy appears to be in a dire state. In this form, it may not be very liquid.
Certificates may be the alternative to physically owning the precious metals. These documents prove that you have ownership over a certain amount of precious metals. This method will release you from having to provide storage space for your metals. You will also not be tasked with transporting them. The certificates can be a risky endeavor in certain situations. In the event that they are destroyed, you may find it difficult to claim your property.
There are several ways that you can invest in precious metals. The most reliable way of investing in the metals is by using commodity ETFs. If your circumstances allow you, you can also have a physical quantity of the precious metals in your possession. Regardless of the method, precious metals are a valued part of your portfolio.