How to Invest in Precious Metals

The world seems topsy-turvy these days. We understand the world can feel filled with bad news lately and peace of mind can feel elusive to many people. That’s why more and more investors are going back to basics and turning to precious metals as the foundation and anchor of their portfolios. 

Having been used as currency and recognized as valuable for thousands of years, some modern investors are clearly seeing what others before them saw—that precious metals can be a great way to store value and to position for future appreciation. 

In this article, we’ll discuss several of the most popular precious metals for investing. We will show you how and where to buy precious metals. And for those of you with individual retirement accounts, we will guide you on how to invest in the precious metals IRA. 

Types of Precious Metals You Can Invest In

The first stops on your exploration of how to invest in precious metals are with the metals themselves. 

Precious metals are elemental metals that have high economic value. Throughout the ages, these metals have been valued for their industrial and practical uses and their scarcity.  

The most popular precious metals are resistant to corrosion, conduct energy, and have been used in manufacturing, investments, jewelry, and currency. They are:

• Gold
• Silver
• Platinum
• Palladium

Each has its own unique properties and applications. 

Gold

Often recognized for its beautiful color and shine, gold seems to be the world’s favorite precious metal. 

It is also very malleable and highly conductive, which makes it very useful in jewelry, thermal insulation, and electronics. Most government mints around the world manufacture their flagship coins from gold.

Silver

Of all the elements, silver has the highest thermal and electrical conductivity rate. Its industrial uses span far and wide, and modern products such as solar panels and most electronics cannot currently function without silver. 

Of course, silver is also a beautiful metal that has been used for centuries as currency and fashioned into jewelry.

Platinum

Platinum is a beautiful metal and is extremely rare. Known for its malleability, corrosion resistance, and density, platinum is widely used in the industrial sector. The weapons industry, the dental industry, and catalyst manufacturers all rely on platinum. 

Palladium

Ongoing automobile catalytic converter thefts help demonstrate how rare and valuable palladium is. Also used in electrode plating and in “white gold,” palladium is an extremely rare metal that maintains stability at high temperatures. It can absorb large amounts of hydrogen, much like platinum. 

How to Buy Precious Metals

Learning how to buy precious metals can be confusing. 

To help you understand, we’ll break down precious metals investments into types, you can get more clarity on where to buy precious metals for your portfolio. 

The two main types of metals investment vehicles are:

• Physical precious metals
• Paper-based precious metals products

Physical precious metals are actual gold bars and gold coins that are tangible and can be held in your hands. 

One can acquire physical metals fairly easily. 

Most cities have coin stores that may sell all types and conditions of precious metal coins and bars. These collectible coin shops are usually dedicated to the trade of different types of precious metal coins and bars, and are a valuable resource when you want to buy or sell your metals. 

The precious metals self-directed IRAs allow for ownership and storage of approved physical gold, silver, platinum and palladium within the individual retirement account.  

A precious metals IRA works like the individual retirement account that you may already own. You can use the funds in your current account to fund your new account and purchase your precious metals inside the IRA.

Paper-based precious metals products play on the ups and downs of precious metals pricing, but do not give the owner physical metals that can be owned and held. 

The most common methods of paper-based trading include:

• Options and Futures. This is for investors that want to maximize leverage and buying power. You can make a lot of money with options and futures, but you can lose it just as quickly, as it’s a volatile tactic.
• Stocks. This usually entails purchasing shares in metals mining companies. Mining companies’ performance is linked to many factors. In many instances rising metals prices alone may not translate to a higher stock price of the mining company. 
• Exchange-Traded Funds (ETFs). You can buy and sell precious metals, but you will have no access to the actual physical metals. Even with ETF ownership, no metals will ever be delivered to you. 

As you can see, deciding how to invest in precious metals requires a lot of thought. 

Take full inventory of your investment needs and strategies, and choose the right method for you.

Pros and Cons of Precious Metal Investing

As with any investment, precious metals have their own potential risks and rewards. Maximizing the advantages and minimizing the risks is the key to long-term investment success. 

Let’s review both.

Advantages

Precious metals can help anchor your portfolio and position it for potential growth. Some of the biggest benefits to ownership include:

• Hedge against inflation
• Tax advantage when owned in an IRA
• Safe-haven asset
• Truly diversified portfolio
• Tangible asset

Disadvantages

It’s important to understand the potential risks of precious metals. By having a complete understanding, you can potentially counterbalance the risk or alleviate it altogether.

The risks include:

• Fees/Cost
• Storage
• Liquidity
• Taxes 
• Paper transactions not keeping pace with metals spot price

Many investors have found that precious metals ownership inside an IRA provides an answer to these risks. 

The precious metals self-directed IRA is a sort of catch-all—providing safe storage, palatable fees, and metals that move in tandem with their respective spot prices. 

When dealing with a reputable precious metals IRA company like Advantage Gold, you can take advantage of their in-house liquidation policy. Not only can you buy your metals from the comfort of your home, you can typically sell your metals back to Advantage Gold. You will not have to search for and deal with a third party. 

Are You Ready to Invest in Precious Metals?

When done correctly, precious metals ownership can give your portfolio protection and long-term appreciation. Metals can help anchor and truly diversify your investments with an asset non-correlated to the stock market. 

For almost a decade, Advantage Gold has helped clients like you. Whether you want a direct delivery of gold, silver, platinum, or palladium to your door, or want us to guide you on how to invest in a precious metals IRA, our trained professionals are here and happy to help. 

Call us today to start the process or send us your contact information and we’ll be in touch. 

We look forward to speaking with you soon.