Many people are turning to precious metals as a way to diversify and stabilize their portfolios. Throughout history dating back to even before the existence of the Roman Empire, people considered precious metals to be the best way to not only display wealth but to store it as well. That is why the various precious metals have a long history of use for jewelry, currency and bartering. Today, many experts consider this one of the best ways to have an investment last for years or even generations. Here is everything a person needs to know in order to understand the precious metals investment outlook.
The first thing a person should know if they are looking to understand the precious metals investment outlook is information concerning each of the four precious metals. Gold resists oxidation and is malleable and ductile, making it useful for industry as well as jewelry. It is the most popular of the precious metals and many currencies are based on it. Silver is incredibly conductive (both thermally and electrically) and is used for everything from jewelry to coins to tableware and even photography. Platinum is ductile and malleable as well as resistant to corrosion which makes it very popular for industrial applications. Palladium is becoming increasingly popular in industry and is mostly used as a catalyst as well as for jewelry.
The next thing to understand concerning the precious metals investment outlook is the various investment options as different types of investments will have different outlooks. The two main options are to invest in physical forms of the metals such as coins or bullion or to invest in paper forms. Some of the most popular options for paper investments in precious metals include exchange traded funds (or ETFs), mining stocks and mutual funds, options and futures and certificates.
One important thing to remember about precious metals is that they are only available in limited quantities. It is not possible to make them; therefore, the only way that more precious metals enter the market is through mining and only a finite amount is mined each year. This means that if the demand for the metals remains the same (which is likely), there will never be an excess of these metals which means the precious metals investment outlook is optimistic. These metals have also increased in value over the last few years as demand increases due to economic uncertainty.
Amount to Invest
Most people who are new to the world of investments will be unsure about how much of their investment portfolio they should put into precious metals. In some ways, the answer to this question is the result of the precious metals investment outlook because if it is good, advisors tend to recommend a larger portion of the portfolio go into these metals. Despite this general trend, specific advice from advisors will vary depending on the investor’s situation with a usual recommendation being to invest between 5 and 20% of the portfolio in precious metals.
When to Invest
If an investor is looking to make a short-term profit with precious metals, then choosing when to invest is crucial. That is because as with all investments it is ideal to buy low and sell high. The short-term precious metals investment outlook is not as important, however, for investors who are looking to make a long-term profit. That is simply because despite the occasional ups and downs, the precious metals market tends to go up over time and is an excellent way to ensure that a person’s money does not lose value.