Platinum Investment

Is Silver A Good Investment?

Why Gold Is A Good Investment

 

What You Need To Know If Considering Investing in Gold.

There are a number of various reasons why you should consider investing in gold, especially as an IRA investment, none more than the diversification of your investment / retirement portfolio.

In 1997, Congress passed the Taxpayer Relief Act which allowed investors to put away gold and other metals into a self-directed IRA. They were responding to investors who wanted to diversify their retirement portfolio from paper assets like cash, stocks, and bonds to add some tangible assets.

Edmund Moy, who is the leading Strategist for The Fortress Gold Group and was also the Director of the US Mint between 2006-2011, stated the following an article he wrote in September 2014: (click here for original source)

"By 2013, the total amount of assets held in all the Individual Retirement Account’s set up in the USA totaled 6.5 trillion dollars, and out of that amount 2.5 – 4 percent were now in non-traditional forms, such as gold."

He went on to state:

“And looking long-term, there are several risks that favor the continued growth in gold IRAs, such as the fragile global economic recovery, potential of aggressive inflation in the United States, growing concern of a major stock market correction and increased geopolitical risks.”

When it comes to building a diversified investment portfolio, investing in alternatives from the normal investments, needs to be considered. The main reason being that diversification helps balance out the variances in values of other types of investment commodities. Sometimes an investor may be heavily invested in a particular type of investment such as stocks or ETF’s, but with a diversified portfolio, they may well have stocks from various sectors from the retail sector to the tech sector and so on.

When one of these sectors, such as the oil sector, is going through a bad patch, as it is at the time of writing this, the chances are good that sectors such as retail or tech stock may be doing quite well. This not only balances out losses from the oil sector, but it can actually help to increase the value of a portfolio significantly over time.

Listen to Billionaire Investor Kevin O'Leary explain why he diversify's his portfolio with gold investment

Investors Want More Diversification

True effective diversification is not just diversifying stocks and ETF's, it is much more than that. More and more investors are looking to broaden their horizons by investing in things like REIT's, corporate bonds, gold, and silver, as well as stocks and ETF's.

BullionVault, who are a leading peer-to-peer gold-and-silver-bullion exchange, based in London, recently produced their annual report and analysis on how varying assets have performed over the last 40 years (1976-2015) in both the UK and the USA. (see report here)

As you can see from the facts below, although not the number one performing asset, gold has beaten other key assets in its returns over the past 40 years and has this century outperformed corporate bonds by a considerable margin.

ASSET PERFORMANCE LAST 40 YEARS

• Gold’s 40-year change (+669% gross of costs) has beaten inflation (328%), housing (598%, excluding costs + yield) and cash (cumulative 535%).
• Commodities have dropped below end-1975 levels (-3.05%);
• REITs are the best-performing asset both since 1976 (9,177% cumulative on reported performance before costs) and also so far in the 21st century (up 484% since 1999);
• Gold is the next best performer since 1999 (+340%) and then corporate bonds (160%);
• Since 1976 gold rose in all 3 years when US stocks lost 10% or more, averaging 9.6% gains. It averaged 11.3% when REITs fell the same, rising on 3 of 5 occasions;
• Cash interest rates have lagged inflation 16 times since 1975. Gold rose in all but 4 of those years, three of them 2013-2015;

 

Disclaimer

Please note that the content on this website does not constitute financial advice and should not be taken as such. The owner of this site may be paid to recommend Regal Assets or other companies. The content on this website, including any positive reviews of Regal Assets and any other reviews, may not be neutral or independent. It is advisable to always speak to a certified financial advisor before making any investment decision.

Current Prices

What Are The Pros & Cons of Gold Investment?

What are the pros to investing in gold?

 

A Shelter Against Volatility

The answer to why an investor should purchase this kind of investment is multifaceted. The first reason to invest is because it can be used as a hedge of protection against market volatility and inflation. Market volatility can affect the value of gold, but it typically affects it much less than other types of investments. One of the reasons for this is that the value of stocks, bonds and ETF's are based on paper money and not in gold.

Protection from Inflation-Deflation

Inflation has always been a concern because inflation weakens the value of paper money. However, gold does not labor under the same constraints as paper money. It has a value that is established mainly through demand. Paper money can be weakened when there are shifts in power from one country to the next, or when there is some sort of political upheaval. In some cases, paper money can be rendered completely worthless, should the affairs of a particular country get bad enough. It is in these situations, gold benefits the investor.

Gold has had a remarkable performance during times of inflation and also deflation. Inflation is basically a period when the economy of a nation is struggling and the cost of living is high. During these times, gold prices tend to increase and that’s why it is often regarded as a ‘hedge against inflation’. Deflation, on the other hand, is when the economy is also struggling and business activity is quite slow. During deflation, it has been seen to perform well too.

Value

Another thing to consider is its value. As you can see from the price chart below, the value of gold did skyrocket some years back, at one point reaching almost $2000 per ounce. Since then it has slipped to around $1200 per ounce (Current gold price can be found in the sidebar to the right). There is some discussion as to its value throughout the rest of 2017. Some experts are expecting gold to experience an explosion in value sending it closer to $2000 per ounce again. Other investors feel that while gold may not rise to this level, its values will steadily increase throughout 2017. Regardless, gold is at a good value and purchasing gold at current prices may be a wise investment as it is poised to increase in value, both in the short-term and the long-term.

What are the Cons to investing in gold?

While we do think that gold is a good investment, there are downsides to investing in it, just like there are downsides to investing in anything. Therefore you really must consider your reasons as to why you want to invest in it or any other of the precious metals, before you start out.

It doesn't produce cash.

What we mean by that is, if you are looking to invest for the sole purpose of generating cash on a regular or short-term basis, gold is not the investment type you want. Precious metals don't pay out a dividend, therefore if that is what you need to consider stocks.

Don't think of it as a short-term investment

OK, we all know that you make your money when what you have invested in increases in value. While Gold has increased considerably in value over the past 20 years, over a limited time frame we see the value of gold bounce in both directions. We are not saying you can't make money short term, if that is what you want to do, you are going to have to be checking its price almost like a Hawk on a day to day basis. But if you take the view that investing in it is for the long-term and it is for diversification, then you can buy it and leave it alone without stressing as to whether it's going to make you any money tomorrow.

 What Are The Options For Investing In Gold?

There are various ways in which you can invest in gold. You can do so through ETF's, closed-end funds, and only stocks such as mining companies. But we want to talk about two particular options for your consideration: Buying physical gold outright and holding it in a vault/depository outside the banking system and secondly investing it into a gold IRA rollover.

We cover both options in detail, explaining the benefits and options available, here on our designated gold companies page. 

 

The post Why Gold Is A Good Investment appeared first on Precious Metals Investment Guide.

source http://www.preciousmetalsinvestmentguide.com/types/gold/

Types of Precious MEtals You Can Invest In

Investing in precious metals has over time become more popular for various reasons. It certainly is not the ‘golden ticket (no pun intended) when it comes to financial security. But because of the options it provides, such as not being affected by either deflation or inflation,  a history of holding its value, and probably the most popular reason, diversifying your portfolio, you can understand why investiture in precious metals, and particularly gold, is on the slow rise.

So what are the various types of precious metals available for investment? There are primarily five types, from the common such as gold and silver and copper to two you may never have thought of before, platinum and palladium.

Below we give you a brief outline and history of four of these metals, the ones that you can only use to invest in a precious metals IRA, plus a link to its individual page with further information.

Gold Investment

Since the end of the gold standard in the early 1970’s, along with the fixed price of gold at $35 an ounce, gold has increased in value and interest. At the time of writing, the value of an ounce of gold was $1,190 and individuals are using it now as a way of both diversifying and increasing the value of their portfolios.

A Tendency To Hold Its Value: A simple look at any trading or value graph will show you that over time, especially through difficult economic times, gold maintains its value. It was only under the gold standard set by President FD Roosevelt that the value of gold dropped, deliberately.

Weak Dollar:  Whenever the US dollar has fallen in value against other currencies (as was the case between 1998 and 2008) investors pour their money into gold for added security. Any mass buying of a stock, product or commodity ultimately sees its value increase and so between 1998 and 2008 the value of gold virtually tripled and then doubled again over the next 4 years from 2008. (See historic gold price chart below). There is a lot of chatter right now about the potential devaluing of the dollar over the next few years, whether or not that happens, the value of gold will continue to hold its value.

Inflation & Deflation: The US is experiencing relatively low inflation at the moment, but what we do know from history is that the value of gold increases, when inflation, the cost of living, increases. Inflation has been high here in the USA on five different occasions since the end of world war two. On those occasions (46,74,75,79.80) the return on the Dow Jones Average was as low as -12.3%, whereas gold was 130%. Deflation, which is when we see business slow down and the nation has excessive debt (i.e. the great depression of 1930) the power of gold increased.

Diversification: At the beginning of this page I mentioned that purchasing silver or gold, in particular, should be seen as a way to diversify to create a greater balance and stability on your returns. The best way to diversify your portfolio is to have your money in investments that do not correlate with each other. When you look at how stocks and gold perform over the same time period, you will see that there is a clear seesaw effect. When the value of stocks was very low in the 1970’s, the value of gold was high. The reverse was seen in the late 80’s and into the 90’s when stocks were high, the value of gold was low and when we had the stock market crash of 2008, what do you think happened to the value of gold? Well as you will see on the chart above, it went up. So gold should not be viewed as a single entity for wealth growth, but a commodity for diversification to help growth and create better stability, whatever the performance of the market.

Check out our specific gold investment page.

Silver Investment

Silver has been described as ‘the poor man’s gold’ due to its low value. Although this is true (the price of an ounce of silver at the time of writing is $17.13 compared to $1,190 for an ounce of gold) the ROI is the key to whether something is worse investing in, not it’s cost of purchase. Also, it is worth noting that gold and silver historically do not tend to rise and fall in value together. When one is doing well, we have seen the other performs less well. For example between November 2008 and  the spring of 2011 (basically from the start of the last crash to the beginning of its recovery), although gold performed well, doubling in value, silver performed even better going from $12.21 an ounce to $51.52 an ounce, that is more than quadruple the return.

As an investor, ensuring that your portfolio is well-balanced and capable of weathering unpredictable economic climate is key to securing your financial future. Diversifying your portfolio is necessary if you want to be protected at all times, and investiture in gold or silver is a great way to do this.

It is important to realize that there is a difference between physical silver and paper silver, and the respective prices. Physical silver refers to the actual metal, which you have the option of storing in your home or in a vault belonging to a custodian. Paper silver refers to the financial instruments that are based on the spot physical prices. Such instruments include exchange-traded funds (ETFs), futures and so on. The advantage of owning physical silver is that you will get the reassurance of always being protected regardless of the changing economic environment. Silver can withstand inflation and a weak dollar, just like gold, which is not something that can be necessarily said about paper silver and stocks and bonds.

It is also important to carefully determine how much you are willing to invest in silver. Do not get carried away by the prospect of investing, just because the price is low, to the point where you risk other parts of your portfolio. Remember the idea is to diversify, not completely do away with other vehicles. The only way you are going to ensure financial security is if you see to it that all grounds are covered, as far assets go.

Check out our specific silver investment page

Platinum Investment

At the time of writing this content, the price of Platinum was just over $980 an ounce. Although that price is below the current price of God ($1191 an ounce), Platinum has been known to increase in value above the price of Gold. The reason for this is due to the fact Platinum is a rarer metal than gold or silver.

Its primary use is in the manufacturing of catalytic converters on motor vehicles. As the demand for emission control on cars increases, so does the demand for Platinum. Although the actual amount of Platinum used in each converter is small (ranging from 1-15 grams depending on the size of the vehicle) there are over 60 million cars manufactured each year (with a 3% yearly growth rate). So as the demand for vehicles increases, so will the demand for Platinum.

The mining of Platinum occurs in mainly two countries, South Africa and Russia. South Africa is the largest producer of Platinum with Russia second, although Russia is the biggest provider of Palladium (see below).

So why should you consider investing in Platinum? Well we go into this in more detail on our specific platinum investment page, but you may want to consider three main reasons:
1. There is a limited source of Platinum. It is rarer than gold and as already mentioned is it primarily mined in only two countries. Not only that, but the actual mining of platinum is costly, making it a metal that is mined on a limited capacity.

2. Because Platinum is resistant to corrosion, along with being highly durable, new uses for it are being discovered on a regular basis, making its demand increase.

3. Although the price of Platinum is fluctuating at present, historically, just like gold, its value has increased dramatically. As the chart below from InfoMine.com shows, since July 1996 where its value was under $400 an ounce, it rose to its peak in 2007 of over £2010 an ounce, (a value gold has yet to achieve) to bouncing around the $1,000 an ounce at present.

Check out our specific platinum investment page

Palladium Investment

The reason why we have put Palladium at the end of the list is due to the fact you probably never considered it before as a metal to invest in, or you have never heard of it.  Palladium comes from the very same group of metals as Platinum, yet it has the ductility and malleability of gold. A relatively new metal, it was discovered in 1803 by an English chemist.

The primary use of Palladium is within industry. Its usage is within multilayer ceramic capacitors which tend to be used in cell phones and laptops. Also, like Platinum, it is a component in the manufacturing of catalytic converters

Because it is in the same group of metals as Platinum, it is also mined in South Africa and Russia, along with Zimbabwe.

In 2016 it was the best performing precious metal, with its price rising more than 20%, making that its biggest annual gain in six years.

When it comes to creating a precious metals IRA, you may not have considered Palladium, but as we show in our list of precious metals approved for an IRA, Palladium can be added, if of course, it is the type that meets IRS approval.

Check out our specific palladium investment page.

The post Types of Precious Metals You Can Invest In appeared first on Precious Metals Investment Guide.

source http://www.preciousmetalsinvestmentguide.com/types/

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