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.
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.
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.
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.
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.
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.
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.