Historically, people look to commodities such as gold in times of economic turmoil. The idea is that investing in precious metals (Primarily gold, silver, platinum) is that it protects your portfolio against inflation. And it can be a tangible product you can quickly access, sell and trade.
Fans of precious metals say because they are physical commodities that hold their intrinsic value, investing in these assets works to keep your portfolio balanced. So, even when the value of the dollar drops, a portion of your portfolio will resist deflation and retain its value. Like any investment, it’s not advisable to put too much money into precious metals—leading to an unbalanced portfolio. Precious metals can be risky and are better to retain wealth rather that grow your bank balance. Speaking with a brokerage such as Birch Gold who has over ten years experience in the precious metals market will help to determine what types of products best suit your investment goals.
Types of Precious Metals Products
Gold bars, like the ones stacked in vaults in your favorite bank robbery movie, are priced at the daily rate with a premium for manufacturing and storage. The smaller the bar, the higher the premiums.
If a vault of bars aren’t your thing then perhaps a chest of gold coins? For the pirate in all of us, gold coins are typically 22k and depending on your country of taxation may be exempt from capital gains.
Banks that offer gold bullion offer two types of accounts – the allocated and the unallocated. An allocated account is one that assigns you specific units of gold and stores them in a depository. This is the safest way to purchase physical gold. An unallocated account does not hold specific units of gold in your name. The advantage here is that you are not charged a storage fee or insurance on the units.
Shares in companies that either trade or mine gold or other metals are another tool used for precious metals investing.
Gold, silver, and platinum jewelry may over time become good investment but for most the cost of manufacturing, and retail markup supersedes the value of the metals themselves. Jewelry that is14k and under needs to be melted down and refined to be classified an investment commodity.
Precious Metal IRA’s
Either opening a precious metal IRA or moving an existing retirement account into a precious metals IRA is a popular move for those who wish long term stability with their retirement funds. You need to open a custodian account, fund the account with cash investment or transfer from your 401K or other retirement accounts. Then you can purchase approved precious metals and other commodities to create a stable fund that should support you long into retirement.
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