Augusta Precious Metals: Why Invest in Precious Metals?
When it comes to growing wealth and achieving financial freedom, there are many ways by which consumers can go about this. A few centuries ago, people didn’t have as many options as we have today, making us the lucky ones. Aside from the various ways we can invest, technology has also made it easy for just about anyone to buy stocks, ETFs, mutual funds, and other investment products.
In the past, investors could only buy stocks from physical brokerage firms but that has changed today. Thanks to mobile stock trading applications like Charles Schwab, Robinhood, and Webull, consumers can buy and sell stocks seamlessly. These mobile applications have eliminated the need for consumers to approach physical brokers to get their hands on stocks.
But while all these investment products are great, many investors aren’t comfortable with a portfolio that consists only of stocks, bonds, and ETFs. This is why they diversify their portfolios by investing in precious metals. You see, unlike these other types of investments, precious metals are generally considered safer investments. Why? Because they aren’t affected by market fluctuation and financial crises which can’t be said of stocks and other products.
If you’re a new investor and are contemplating whether these assets are worth your time and money, then you might find this article helpful. Through the rest of this piece, we’ll go over a few reasons why you may want to consider diversifying your portfolio using precious metals.
What are Precious Metals?
Precious metals are naturally occurring metals or elements that are rare and have a high economic value due to factors like their scarcity, historical importance, and use in various industrial processes. The most popular precious metals on the market today are gold, silver, palladium, and platinum.
These commodities have played important roles throughout financial history. They were minted into coins and were used to carry out trades. As years passed by, these commodities, especially gold, played an even more significant role when the bimetallic standard was established in the U.S in 1792.
Why Invest in Precious Metals?
There are several reasons people invest in these valuable metals. Below are a few of those reasons:
Historically Safe Assets
One of the most attractive traits of these assets is the fact that historically, they’ve proven to be safe investments or assets. As we mentioned earlier, other investments like stocks and bonds are at the mercy of the economy. Their value can quickly plummet in times of financial crisis like the stock market crash of 2008.
But the 2008 financial crisis was a great time for these scarce commodities. While the value of other assets was spiraling to the ground, the value of gold rose significantly from $700 per ounce in 2008 to $1900 in October of 2011. So, it’s safe to say that these commodities thrive in economic upheavals. Click here to learn more about the 2008 financial crisis and stock market crash.
Precious metals like gold have intrinsic value. What this means is that they cannot be devalued in any way. As an investor, gold is a great way to preserve your wealth as it is inflation-proof. Its value today will be the same in ten years, or perhaps, even greater; the same cannot be said for paper money.
Paper money loses value when an economy experiences inflation because the price of goods and services increases over time. This decreases the number of goods and services that consumers can buy with paper money in the future as opposed to the present.
The beautiful thing about precious metals investment is that investors can now buy these assets online from the comfort of their homes. There are various reputable dealers online that investors can work with. However, beginner investors must be cautious as they have little to no experience working with these dealers. Some pose as credible dealers to defraud unsuspecting investors. Visit sites like https://www.metal-res.com/ to read reviews of gold companies before making any purchases.
Increasing Global Demand
The demand for assets like gold and silver has been steadily rising. Thanks to their scarcity, investors can make huge returns on their investments. Naturally, an increase in demand for an asset leads to an increase in the value of the asset. What this means is that you can not only protect your wealth with precious metals but also grow it significantly over time.
Financial experts advise that investors allocate at least 10-15% of their portfolios to these naturally occurring assets. This helps to spread their investment risks even more since these assets also aren’t 100% safe investments. Like every other type of investment, they come with their own risks, one of which is the fact that they may not be as liquid as other investment products. Before investing, ensure you fully understand all the risks involved.