BENEFITS OF PRECIOUS METALS INVESTING
Precious Metals such as gold, silver, platinum, palladium and even copper are physical commodities. If you own a metal, you actually own a piece of that precious metal. This is opposed to things like a share of stock, which only exists on paper and can actually decrease to a value of zero.
Before we get into the benefits of investing in precious metals, lets look at a few of the reasons why you would not want to invest in precious metals:
- Precious metals do not pay a dividend/income. Unlike some stocks, REITs and mutual funds, precious metals do not pay a monthly or quarterly dividend. Precious metals can be thought of on the same investment plane as real estate, art, automobiles, stamps, wines and non mineral/farming bearing land purchases.
- Storage. Storing your precious metals (real money) at home, bank vault or storage facility is simultaneously a benefit and a draw back.
- Volatility. Precious metals are traded on a global market and are subject to external factors such as commodity regulation and manipulation, government debt loads and global supply and demand. All investments contain volatility. And for the record, a savings account that pays negative or less than 1% is not an investment.
- Tax considerations. Some precious metals such as bullion are taxed at rates higher than other investments. Other precious metals such as numismatics are taxed more favorably. Consult a tax advisor for your specific tax consideration.
The decision to invest in precious metals is a personal one and should not be entered into without the considerations above. Most investors see precious metals, specifically gold and silver as the missing piece of their total investment portfolios. Precious metals have historically offered a counter balance against inflation, currency devaluations, wars, terrorist attacks and bank runs. Below are the top reasons that investors flock to precious metals.
- Physical, portable and tangible. – Not many investments can be held in your hand or in a suitcase that have immediate recognition globally. Precious metals offer this very advantage.
- Globally recognized. Does your share of Ford stock hold value in South Africa, Norway, New Guinea or China? Precious metals are absolutely recognized around the world and can be quickly changed into a currency of your choice.
- Privacy. – Whereas real estate requires a registered deed, automobiles require registration, stocks require a trading account and IRA’s require disclosing tons of private information, most precious metals can be purchased rather discreetly. This is not an invitation to launder money, so indeed check with your accountant for specific details.
- Volatility. Precious metals are traded on a global market and are subject to external factors such as commodity regulation and manipulation, government debt loads and global supply and demand. All investments contain volatility. And for the record, a savings account that pays negative or less than 1% is not an investment.