Author:
• Sunday, February 23rd, 2014

Metals and related commodities investment

Gold and silver comprise some of the most traded precious metals, the others being platinum and palladium. These metals provide a safer and more stable investment than other investments because they have a low correlation with the U.S market. This means that their trading power is not proportionately or inversely related to the performance to the U.S dollar. As such, they make a sound investment, especially when the U.S economy flops, or there is inflation of the dollar.

Popular investments

Most people concentrate on investing in mutual stocks, real estates and bonds among other dollar-valued commodities. However, when these investments get affected by the performance of the dollar, investing in these valuable metals, in whatever form, can diversify their investment as well as offer some stability against a bad performing economy. Most people, however, find investing in silver and gold, among the other metals, difficult as they envision the process being rigorous due to the laws and requirements around them.

gold egg

Precious metals investment

Potential investors, wishing to diversify their investment portfolio, whether for the near future or retirement, can purchase bullion, affirmed coins, numismatics and bars of varying sizes and prices. Additionally some people buy necklaces, earrings, finger rings and other commodities, made of these metals, for sale at a later date, when the spot prices go up. The spot prices of these metals, at any given time, depend on the weight and face value of the coin/ numismatic and or the bar/ bullion. As such, a 10oz bar costs less than a 1kg one.

Gold and silver IRA

The need to secure post retirement lives drives people to seek the most stable investments they can think of so that when the time comes to retire, they will have something tangible. The U.S economy, like other economies of the world, goes through ups and downs, and the dollar cannot be relied upon, 100%, to be up when a person needs his/ her investment. As such, most people have made a move, and continue to do so, to include these metals in their individual retirement accounts (IRA). Depending on the IRA type, a person can invest these metals tax free and withdraw at a fee, or invest at a fee and withdraw free of charge.

gold bars and money

Each IRA type has rules and regulations that govern it, including who can invest, at what age, when the investor can withdraw and dealer fees. A person must fully inquire of the rules, governing each IRA so that he/ she makes an informed decision and avoid unnecessary charges and or take advantages of any waived fees. Investing metals in IRA requires the potential investor to seek a company that deals these metals as well as a custodian. The law does not allow people to keep their physical metals, from IRA, in their houses and as such IRS-approved custodians, the likes of banks and metals dealers’ deposits, must be chosen. People can, also transfer some of the funds in their already existing IRA to purchase a variety of these metals in a process called rollover.

ETF

Another gold commodity people can invest is the ETF (Exchange Traded Funds). These ETFs, unlike purchasing metals at a commission and selling at lower-than-spot prices, do not attract commissions, and there is no need to purchase physical metals or manage the metals personally. With ETFs, a person gains huge tax benefits in that taxes on capital gains only apply during the sale of the ETFs and not any time before that.

gold piggy bank

Mutual funds

Investing in mutual funds is another way of investing in silver and or gold. Instead of buying physical metals, a person buys shares in these metals trading companies and then gains from whatever the company trades. This investment saves an investor the hassle for having to find a custodian, follow up on spot prices and or handle the metals him/ herself; the company does all the trading.

Conclusion

Investing in gold, silver, palladium and platinum provides more stability on anyone’s investment, against fluctuating markets and inflating dollars, due to their durability and their low correlation to the U.S dollar. These metals do not, unlike other investments, depreciate in their value and as such, cannot be expected to lose their purchasing power over time. Additionally, the production of these precious metals is minimal or extinct in some cases (such as coin production), and as such poses no threat of flooding the markets. High demand and low supply make these metals more desirable, far and above other properties. People can invest in coins/ numismatics, bars, bullion, jewellery, ETFs, IRA and mutual funds among others.

Author:
• Saturday, January 11th, 2014

As the world continues to change, the value and form of currency follows suit. For those seeking a stable means of investing, the rapid but risky stock market is a poor choice given that it violently fluctuates over time. Likewise, long-term bond investments only return what was original invested at a later date with little gain. Both are subjected to changes and may lose their value under unfortunate circumstance.

However, gold and silver are a different story. They are best served as a safety hedge during points of deflation and recession, which makes them a prime choice of investing for anyone looking for a secure and stable option no matter what condition the global economy is in. But what is the reason for these two precious metals being seen as such valuable assets?

Simply put, they have both cultural and industrial uses that maintain their value above other forms of currency. Both are seen as signs of wealth and power universally that crosses borders without losing their value as paper money does. That makes them two of the best liquid assets that you can invest in, but which may be considered the best choice is dependent on what the investor has planned.

Gold never truly loses its value as a rare mineral that has appeal to just about every culture on the planet. Because there is virtually no up-keeping required, as it is resistant to corrosion and doesn’t lose its luster or shine, it has been used to make jewelry, crafts, and coins throughout history. As an industrial resource it serves as an excellent conductor of both heat and electricity, finding its uses in many components used today. But its true worth can be found by investing in gold alone.

As mentioned above, these precious metals are excellent liquid assets. But most of the gold in the world has been devoted towards investments already, to cope with the fluctuating currency of paper money and stocks. Gold only continues to rise in terms of value for this reason at a steady rate, allowing the wealth of its investment to be passed down.

Silver, while not as valuable as gold, carries many of the same traits. As a mineral it is also fairly rare, with the rising demand for it decreasing the amount available and raising its value further. When judged as industrial resource, it is commonly used in electronics, purification systems, dentistry, mirrors, and windows.

However, compared to gold, silver tends to be subjected to change more so than gold. In terms of market value silver is less stable with higher climbs and lower falls than gold, meaning that returns on come faster. Of both precious metals, silver is also more likely to be found in the general market as jewelry or coins and can be bought and invested in at a lower rate.

So gold serves as a more stable, but expensive investment that can weather any economy, while silver can be invested in easier and earn a higher return in shorter order, but is subjected to greater change and risks. Despite their different values, both have their shared positives in their worth as asset investments that put them above stocks and bonds. But, as with all opportunities, there are risks involved that those who decide to take to investing should be aware of.

For starters, there is minimal regulation when it comes to the selling so unscrupulous individuals may attempt to fleece those who are not savvy out of their hard-earned investments. Transaction and storage fees are also significant due to the amount of security involved in protecting coins and bullion, two of the common forms that both of the rare minerals can be found under. In addition, taxes on gold and silver are done at a higher rate than other forms of investing.

To sum up the above article in short order, both are valuable minerals that have thousands of years of worth in cultural and industrial investments that span the globe. Their uses are so vast and widespread that they maintains their value no matter what state the economy is in. While gold is considered a more stable investment that resists changes due to the fact that the majority is tied up outside market and commerce, silver is easier to invest in despite being affected to a greater degree. But, like all other means of investing including bonds and stocks, there are risks involved that can be minimized by being aware of all the facts when you venture into investing.