Precious Metals Investment Opportunities

Smart Finance

Investment opportunities provide ways for people to generate profits and save towards the future. Nowadays, finding an investment that can maintain its value, let alone generate profits is half the battle. Precious metals investments carry a built-in value that acts as a hedge bluehost against falling dollar values and struggling economies. Unlike real estate and stocks, curious investors have a range of options to choose from in terms of start-up prices so practically anyone can take advantage of the earning capacities precious metals investments have to offer.

Money Wise

Precious Metals
Precious metals are so named because of their inherent value and in some cases, their scarcity. Silver, gold, palladium and platinum all fall within the category of precious metals. Whether in bulk or bullion form, rare coins or materials used within the manufacturing industry, these metals have become viable and for the most part, stable investment options.

Gold and silver are well known for their varied uses in jewelry, coins and bullion. Platinum and palladium, while less well known are nonetheless in high demand as raw materials according to Bankrate.com. Ultimately, price and value differences between the different metals can vary from market cycle to market cycle. This means metals like palladium and platinum can be valued higher than gold (a metal known to maintain a high value) depending on market conditions.

When investing in precious metals, these items tend to gain in value over time. So, anyone considering precious metals investing may not want to approach it as a short-term investment strategy. A minimum of three years is required to see any type of considerable gain from a precious metals investment.

Investment Options
Investment options within the precious metals market run the gamut in terms of price ranges and areas for investing. Precious metals are traded as commodities, which open up the stock market to precious metals investing. Rare coins provide another avenue for people who have an interest in ancient gold and silver currencies.

When investing in the stock market, precious metals stocks are typically offered by the companies that mine them. Much like any other stock option, supply and demand has a considerable influence on how a particular stock will perform at any given time.

Though prices may fluctuate, the benefits from investing in precious metals lies in how these commodities hold their value regardless of market conditions. This characteristic alone makes it less likely that any purchases will lose their value past their initial buy-in cost.

Market Effects on Precious Metals
With supply and demand being the determining factor for most any investment opportunity, the precious metals market holds an advantage over other investment options. As these metals derive their value from their scarcity, this becomes an advantage in terms of any supply/demand variables influencing the marketplace.

For example, gold and platinum exist in limited supplies, as there is only so much gold to be mined from the earth. The same goes for palladium since this metal is only found alongside platinum ore deposits. Silver, while less scarce nonetheless holds an intrinsic value in terms of its history as an ancient currency.

Within strong economic markets, precious metals tend to move together so investment earnings are likely within each metal category, according to Forex’s news site. During slow market growth or even market declines, precious metals are more likely to maintain their value as other investment options, such as real estate and commodities in general experience losses.

Investment Portfolio Effects
A diversified investment portfolio provides protection against overall losses if certain investments should lag while others show gains. Because of their value-holding ability, precious metals can help to balance out a portfolio by providing a hedge against potential losses in other areas.

This advantage becomes especially true for metals like gold, platinum and palladium. Data gathered by Bankrate.com shows platinum and palladium prices tend to follow gold in the market. When the demand for platinum and palladium is high, these metals can actually surpass gold value on the market.

High demands for platinum and palladium come from the manufacturing and technology industries as these materials are used to make products. Even silver metals can see profit gains in the marketplace as certain countries, such as India place a high value on silver metals.

By including precious metals in an investment portfolio, both stability and eventual earnings potential are possible regardless of how other investment areas perform.

Rare Coin Investments
Rare coin investments derive value from the history behind the different pieces and the limited supply available. Ancient coins from long-gone civilizations, such as Mesopotamia, Rome and Greece were once used as currency and in some cases, were owned as treasure by kings. Their scarcity in today’s world further adds to their perceived value as investments.

Based on the Sheldon Rarity scale, a coin is considered scarce or rare when only 75 or less are in existence. Of course, a coin’s content in terms of gold versus silver also factors into its overall marketplace value though a 3,000 year old silver coin will still fetch more than a 1,000 year old gold coin.

Of all the precious metals markets to consider, rare coin investments require the most know-how when it comes to selecting coins for purchase. For the most part, the rare coins market lacks regulation and standards so interested investors should do their homework before buying. Working with a respected and experienced dealer can also help ensure any investments made are genuine.
Gold Silver Bars
Bullion Options
Bullion investments entail purchasing metals in standardized weight amounts, such as bars, rounds and ingots. Compared to rare coin pieces, bullion options follow precise and set standards, though these standards do allow for benefits not available through other precious metal investment options.

Since each piece is priced according to weight, purity and type of metal, bullion investments are as good as cash when it comes time to sell. This makes for a highly liquid as well as portable investment option. Bullion bars with a .999 percent purity rating display recognizable markings which makes them easy to sell at an expected price.

Market prices for bullion pieces can easily be tracked according to how their respective metal commodities perform in the market. This means gold bullion will most likely perform better than silver pieces, while platinum and palladium prices will vary based on market demand.

Stock Market Investing
For a less “hands-on” investment choice, precious metals stocks work in much the same way as any other stock market commodity. Precious metals ETFs and precious metals mutual funds are two of the ways an investor can participate. ETFs or exchanged-traded funds consist of stock shares that easily trade on a day-to-day basis, just like any other stock option. Investors looking for more of a short-term option in precious metals may want to consider ETFs.

Precious metals mutual funds entail even less investor-involvement than ETFs. Like other mutual funds, precious metals funds are handled by fund managers who determine which types of metals to include in a particular fund offering. Of course, having a fund manager entails paying service fees so this option is more expensive than ETFs.

For diversification purposes, mutual funds can make for a sound portfolio investment provided the mutual fund includes two or more different metals. On the other hand, ETFs usually include only one type of metal, which provides less of a hedge if that particular metal does poorly on the market. There are, however still a few ETFs that include two or more metals per stock.

Changes in the Economy
Significant changes in the economy are well known for the devastating effects they can have on many types of long-term investments. The recession of 2008 is no exception with many losing thousands of dollars in retirement and investment savings. In 2008, investors in search of stability and potential profit earnings flocked to the precious metals market in record numbers, according to Forex’s news site.

As dollar values decline within a failing economy, investments like precious metals rather gain in value while real estate and many other stock investments declined in value along with the dollar. In effect, precious metals have an inherent value that’s unaffected by falling currency values. In addition, precious metals perform even better within a strong economy as the demand for raw metal materials increases. Interestingly enough, as dollar values recover inside a strong economy the value of precious metals increases as well.

Considerations
When considering any investment opportunity, a certain amount of research is needed. As far as the precious metals market goes, several factors affect how well an investment performs in the market. While the do-it-yourself investor will most likely see some profits in the precious metals market, working with an experienced partner can make all the difference in the world when it comes to profit gains.

The Monex Deposit Company has been in the precious metals business since 1967. Through the years, Monex has built an established network of precious metals dealers and wholesalers that operate on a global scale. These deep roots enable Monex to offer a range of investment options that cover all price ranges.

The Monex Deposit Company offers a full-service menu which includes:
• Rare coins
• Storage accounts for coins and bullion pieces
• Investment accounts with four-to-one payout ratios
• Home deliveries for bullion and coins

Considering the factors involved in finding a sound investment opportunity, investors may want to take full advantage of the earnings available through precious metals investing. With an experienced industry partner like Monex, investors have the best chance of reaping considerable returns from precious metals investments.

Sources-
http://www.themoneymetals.com/palladium/
http://www.bankrate.com/finance/investing/invest-precious-metals-1.aspx
http://goldnews.bullionvault.com/gold_bullion_investment_gold_market_history
http://www.nasdaq.com/article/protect-against-qe-with-these-precious-metal-etfs-etf-news-and-commentary-cm175523 – September 2012
http://www.precious-metal.org/
http://www.bullion-bars.org/
http://www.fxempire.com/education/forex-basics/an-introduction-to-precious-metals/
http://investorinsight.net/2011/07/investing-in-ancient-or-rare-coins/
http://www.rarecoinvalues.org/an-introduction-to-precious-metals-trading/

Rate this post