Precious metals like gold, silver, palladium and platinum have been used as forms of investments for quite some time now. There are several reasons why investors may choose to add precious metals to their portfolios, including the fact that precious metals can create long-term wealth, they are more stable than many other forms of investments, they can be physically held and they hold intrinsic value.
Smart investors have always used precious metal investments to diversify and protect their long-term investment portfolios, but this type of investment vehicle is quickly gaining popularity with a younger generation of investors who are new to the game. If used properly, precious metals can help any type of investor gain wealth for their future, regardless of how much they wish to invest. This is why so many investment newcomers are investing in gold and silver, as well as other types of precious metals.
Investing For the Future
The idea behind creating an investment portfolio is to build wealth for the future. The investor will typically add a wide array of different investment types to their portfolio, with the hope that each of the investments will create long-term gains to be utilized in the future. The goal is to purchase each of the investments for a certain price and then to hold onto them until they double, triple or quadruple in value.
Once this has occurred, usually after many years, the investor will then be able to sell off the assets and make a very large amount of money. They can then use this money to retire or do whatever else they wish with it. Smart investors choose a variety of different investment options because they don’t want to ‘put all of their eggs in a single basket’. If the investor chooses only one type of investment vehicle, such as a particular stock, and that stock dramatically loses its value due a crash in the stock market, the investor could end up losing all of the wealth they put into their portfolio. A properly diversified investment portfolio means that if some of the investments lose value, the others will keep their value and the investor won’t lose everything they have.
Why Precious Metals are Gaining Ground
In the past, a smart investor would typically devote about 10-20% of their investment portfolio to precious metals. However, as the world economy continues to struggle and more traditional investment vehicles are not turning profits, more investors are investing in gold and silver to help protect their portfolio’s worth. There are several reasons why precious metals are more stable long-term investments than traditional investment vehicles.
Precious metals are always in demand, because they are used in a number of manufacturing industries and because they are used as currency along with making of jewelry. Their supply is low right now and it will probably not be easier to obtain precious metals in the future. This means that the value of precious metals is likely to gain in the future. Precious metals are also not tied to other market factors as much, so they will hold their value when other investments lose value. Because the worldwide market doesn’t appear to be rebounding anytime soon, new investors are turning to more stable and long lasting investments, such as investing in gold and silver.