Whether you’re a serious investor or someone who simply dabbles, the goal is always the same: increasing your wealth. Investing in gold and silver should be considered a part of your strategy now, more than ever. Before doing so, though, it’s important that you understand what makes investing in gold and silver such a sound decision, what experts predict will happen with the precious metals market in the near future, and the various methods for doing so.
What Makes Investing in Gold and Silver Such a Sound Decision?
Typically speaking, investing in gold and silver won’t result in substantial short-term gains. It’s better used as a way to protect your assets from the ravages of inflation. To understand this, you only need to look at the average annual value of the spot price of both. For most years, you’ll notice that neither experience sudden short-term gains.
When they do, it’s usually relatively easy to understand why. Many who normally ignore the precious metals market turn to it when traditional investments aren’t performing as normally expected. For instance, both gold and silver experienced sudden, virtually unexpected gains when the economy suffered in the early 2000s. It happened again with the recent “Great Recession.”
Unfortunately, these pleasant surprises are usually only temporary. Once the economy stabilizes, many return to their previous preferences for investing. Of course, that isn’t to imply that gold simply returns to its previous values. It does generally maintain at least a portion of the additional gains experienced during these times.
What Do Experts Predict Will Happen with Precious Metals in the Near Future?
Right now, the opinions of experts are conflicted. Some state that the economy is recovering and will continue to do so for the foreseeable future. They predict that economic prosperity is returning, and traditional investments will again begin to perform as they usually do. Others are predicting that any current economic growth is only temporary, and that flawed fiscal policies around the globe will lead to additional economic distress in the near future.
Regardless of which expert is right, anyone who takes a look at the performance of the stock market from one decade to the next will notice a trend: it experiences a sudden drop in value, which is always caused by worries about the economy. Whenever this happens, those vested heavily in precious metals experience the benefits of doing so. Those who don’t already have a notable stake are forced to buy at higher prices, or miss out on the surge all together.
How Can You Invest in Precious Metals?
There are four major ways you can invest in precious metals:
- Bullion, bars, and rounds
- Minted coins
- Electronically traded funds
- Mutual funds
Coins, bars, bullion, and rounds can be purchased with certificates, in which case they’re stored at an off-site facility. When physically purchased, the investor is responsible for storing and securing them. They’re all closely tied to the spot price of gold and silver with coins having a slight mark up due to the cost of producing them.
Electronically traded funds (ETFs) and mutual funds are also virtually identical. The primary difference between them is that mutual funds are managed on your behalf by an expert, while ETFs are personally managed. They’re also closely tied to the spot price of the precious metal they represent. You are, however, responsible for various fees associated with buying and selling them. Mutual funds also involve additional management fees. Because of these fees, both ETFs and mutual funds are seen as slightly less profitable.
Regardless of how you decide to start investing in gold and silver, it’s clear that holding a position in either is a wise decision.