Buying and trading precious metals is not a new thing for humans. It is something that we have always done since the beginning of time. Gold and silver were seen as status symbols back before we even had indoor plumbing. If you owned enough of it, then you were seen as a powerful, well-to-do member of society. Everyone wanted to work for you, do you favor, and be your friend.
Not much has changed since then. The wealthier you are, the more power you have over your environment. While our form of currency may have changed, our obsession with gold and silver has not. We still use gold for jewelry, collecting intricate necklaces, earrings, and bracelets because they are beautiful and expensive, and everyone wants them.
We still use silver for jewelry too but as technology advanced, we discovered more uses for silver. Silver is now used in electrical devices such as wires, vehicles, and smartphones. Its uses are limitless because of its crucial role in the tech industry.
While we are no longer hoarding gold, silver, and platinum in our homes to display our wealth, these precious metals obviously still have monetary value and demand. Precious metals are super popular in the investing world at the moment, gaining popularity with each passing year. If you want to invest in gold, silver, or platinum, then you should really do your research first. As with anything, there can be pros and cons to the investment so you should weigh all your information carefully.
Here are the pros and cons of precious metal investing.
Say goodbye to inflation
If you are a seasoned investor, you know how much inflation can hurt your stocks. As inflation levels rise and investment stocks plummet, you are going to wish you had something that will still hold its value despite the twists and turns of the economy.
Investors love Gold and Silver for this reason. The value of gold or silver will not change in a matter of seconds. And if the price drops or increases, it will do so at a steady rate and will not be a steep, dangerous drop-off like you might be used to. These are tangible assets that make it easier to put a cash value on them.
It is sort of expensive
It is not cheap to buy gold or silver. A simple coin or brick of gold can break some people’s banks. This makes them not as good for those of us who may be new to investing or just starting. You may not have the money put aside to purchase something like this that is a long-term investment.
It cannot be hacked
How much of your investments are online? Probably all of them and that’s great! Online can make it easier for you to manage your investments, change your strategy, and invest in new stocks. However, it also opens you up to a lot of potential dangers.
Hackers are out there constantly trying to find new ways to earn money by hacking into investments and stealing profits. It happens all the time, and while everyone can take precautions, hackers can still slip through the cracks.
With precious metals, you do not have to worry about hackers. They are tangible investments that are stored with you or in a secondary location so your precious metals can always be safe.
But you can be scammed
You do not have to worry about being hacked and losing your gold. You can, however, worry about being scammed. Precious metals attract every sleazeball scammer under the sun. I don’t know why, it probably has to do with the fact that we’ve been obsessed with precious metals since the dawn of time, but it’s true.
You have to be extremely careful when you start investing in gold, silver, and the like. There will be numerous people looking to make a deal with you. They will claim they want to sell you silver, or gold, perhaps if you are already wealthy platinum! Who knows what mumbo jumbo they are trying to sell you at this point? They are just looking for some money.
Do not be careless enough to give your money to the first person who claims that they want to sell you gold or silver. Vet them first. Ask who they are, what company or institution they are from, how long they have been in business, and where the precious metals they are trying to sell you came from.
If they cannot answer your questions or you see inconsistencies in their story, do not give them any money. They probably are not legitimate precious metals dealers, and they probably don’t have any to sell you.
They diversify your portfolio
Portfolio diversification is essential to good investing. If you invest everything you have into one single stock and that crashes, you lose the whole kitten caboodle. You do not want that! The whole point of investing is to earn more money!
You want to make sure you have a mix of different stocks, bonds, mutual funds, efts, IRAs, and commodity investments so you do not have to worry about anything. If one of your stocks fails, you will still have others to bounce back with. That being said, if there is a market crash, it can significantly affect your investments.
By investing in precious metals, you make sure that you do not have to rely on a good economy nearly as much. You will still have the gold or silver around to help tide you over.
If you are not careful, you can be hit with some serious fees or penalties
Just as there are a lot of ways to invest in precious metals, there are also a lot of ways to do it wrong and wrack up fees. Only certain types of gold and silver can be entered into certain accounts, there are new tax implications to be aware of and if you are not careful, the IRS could get involved. You can prevent this from happening by talking to a professional or doing research yourself on what you can and cannot do with precious metals.
