Precious Metals Investment Outlook is Strong for New Investors

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All good things must come to an end, they say.

So for you, a late arrival to the precious metals party, surely you’ve showed up too late, surely gold’s 12-year bull run is all but over and surely the last calls have long before been made on silver, platinum and palladium. Right?

As it turns out, according to the latest market projections and forecasts, wrong. The precious metals investment outlook is indeed very strong for the next two years.

In fact, many of the top analysts and calculations are predicting record gains through 2014 even despite all of the great gains each metal has made already.

But before you roll up your sleeves and dive into the precious metals investment outlook, it’s important to remember why you’re here in the first place.

This article seeks to provide both, via new information and a helpful reminder.

First, the Outlook
Each of the four main precious metals – gold, silver, platinum and palladium – is, according to 37 forecasts, projected to reach record gains for each of the next two fiscal years. This is particularly compelling for gold, seeing as this means that it will likely sustain its astounding growth over the past decade – plus, through times good and bad, through booms and bubbles and recessions and collapses, steadfastly throughout.

The story for the rest is similarly compelling – and the net result, that the gains are likely to be remarkable, is no less impressive.

Now, the Reminder
Question No. 1: Why, again, are you investing in precious metals?
That’s likely for two reasons. The most probable reason is that you’re trying to hedge your portfolio, and make sure you protect yourself against volatility that might take hold with regards to the rest of your investment holdings.

This is one of the reasons that the precious metals investment outlook is so strong: it’s nearly always strong, not only because of the way that gold, silver, platinum and palladium are, but also because of the way that investors tend to treat them when times go poorly.

First, know that gold, silver, platinum and palladium tend to respond differently to market factors than do the rest of the market. This is what makes the precious metals investment outlook so bright. And that wheel tends to turn itself. That’s because, the second anything else in the stock market tends to sour, antsy investors will pounce on precious metals, buying up gold coins, bars and bullion by the boatload in order to compensate for whatever losses they may already have incurred. This, of course, tends to jack up prices – and create attractive gains for anyone already holding them.

Question No. 2: How much riskier are precious metals than other investments?
Like anything else, no matter how encouraging the precious metals investment outlook seems, there’s going to be some inherent risk involved. Still, if you manage your risk well, that precious metals investment outlook will do well to make money for you.

Managing risk is all about knowing what you’re investing in. That is, are you investing in the precious metal directly, through bars, coins or bullion? Or are you investing in it indirectly, in the form of buying common stock or bonds in a related company?

To keep it simple, know that the farther your holding gets away from the actual metal, the more risk there is. That’s because the more layers of your investment, the more risk.

So, buying gold bars is less risky than buying stock in a gold mining company.

Though with this precious metals investment outlook, the risk seems worth the rewards.