How to Invest in Precious Metals: the right way

In this article, you will learn how to wisely invest in precious metals (Gold, Silver, Platinum).

Whenever you are thinking about making investments to secure your future, you should focus on diversification to minimize risk and maximize your chances of making huge profits. Allocating a certain part of your investment portfolio towards precious metals such as gold and silver is a useful method of diversifying your investments.

A significant benefit of investing in precious metals is that they are not related to the traditional stock market and bonds. Therefore, investing in precious metals can be highly profitable, even if the stock market is going through a rough patch.

When things like the stock market and Crypto go down, precious metals go up, or remain stable in value.

Record-breaking inflation is causing people to think about money in a different way. How can you protect your cash money against inflation? One of the many ways is by purchasing and holding precious metals such as Gold, Platinum and Silver.

Why Invest in Precious Metals?

Precious Metals are a good bet against rapid inflation.

Investing in precious metals provides many different benefits. Some of them are:

  • The prices of most precious metals increase at or above the inflation point, so it is a reliable hedge against inflation.
  • Unlike stocks and Crypto, precious metals are real tangible assets. They have great value beyond investment purposes, such as using them for jewellery and other industrial applications.
  • Buying precious metals is a reliable form of liquid investment as you can easily sell such metals and get cash when required.
  • The price movements of the precious metals are typically different from the direction of the stock and bond markets. Therefore, investing in precious metals is a reliable method of portfolio diversification.

Risks of Investing in Precious Metals

There are certain risks and disadvantages associated with investing in precious metals as well. If you choose to hold the precious metals physically, you will have to consider various factors such as safely storing them and insuring them.

Moreover, if you sell these metals at a profit, you will likely have to pay tax to the IRS, which will significantly reduce your overall profit. Direct investment in precious metals does not generate income.

Another significant risk of investing in precious metals is their price volatility. Numerous factors such as changes in the economy, federal policies, regulations, demand, and mining conditions can affect the cost of precious metals.

Furthermore, if you are deriving income from precious metals in the form of stocks, ETFs, and mutual funds, you can face various risk factors such as cost overruns in a mining company. Moreover, there is a great correlation between the stock market and income derived from precious metals.

How to Invest in Precious Metals?

There are multiple ways to invest in precious metals, let’s focus on the best ones.

Now that you are familiar with the advantages and risks of investing in precious metals, you can easily decide whether you should invest in them.

Let’s explore the top two ways through which you can invest in precious metals.

Buy and Hold Physical metals

Buying precious physical metals in the form of bars, coins, or jewellery is a common way of investing in precious metals. You can hold them as an investment. The cost of these investments will increase as the price of the precious metal increases, and you can sell them at a higher price after a certain period.

This is the absolute best way to invest in precious metals if you fear an economic recession.

The best way to invest in precious metals assuming there will be an economic recession in the future, is to buy several different small pieces of gold, silver and platinum so that they can be resold easily once it’s necessary. The opposite of this, would be buying a single 1 kilo bar of Gold, which will be extremely hard to sell in pieces, unless you have the right tools to melt it or break it apart.

Buy and store metals in your own private premises or at a local PRIVATE vault.

The best way to store the physical metals you purchases, is to so keep it under your bed, or in cases where you cannot leave it at home for security reasons, keep it in a privately held custodial vault.

I would suggest you to avoid government funded banks, because in times of extreme recessions, these can seize your assets without your permission. Private Vaults can rarely do so.

Precious Metals Investment Products

We live in the Digital Era, so you can invest more easily.

If you do not want to hold precious metals physically, you can choose to buy precious metals-based investment products. It includes the shares of metal mining companies, exchange-traded funds (ETFs), or mutual funds. The profits from the investments will increase with time when the price of the precious metals increases.

One of the most reliable ways of investing in precious metals is through the stock market. A lot of companies allow you to trade precious metals. Some of these popular companies are First Majestic, Silver, Franco Nevada, and Wheaton Precious Metals.

Even if you choose to buy the precious metals in physical form, you can rely on large-scale companies and jewellery stores to get the metals as per your requirements.

Some of the best brokers that allow you to purchase precious metals ETFs are: Interactive Brokers and RobinHood.

How to Store Precious Metals?

Once you have some Precious metals in your hands, the next step is to safely store them. The good thing is that there are multiple options to store precious metals. Some of these options are much safer than others.

Following are the top ways to store precious metals:

Banks (the worst way to store precious metals)

Storing precious metals in your home is not a smart choice because they can become a target for theft or burglary. Generally, storing the metals in a bank is a reliable and safe way of keeping the metals secure.

I say Generally safe because in times of economic stability, you can be sure nothing will happen to your assets stored in a bank (this includes cash in your bank account).

However, in times of economic recession, wars, hyperinflation and catastrophic events, all assets stored in banks are in extreme danger of seizure.

Also, keep in mind that most banks charge a significant amount of money to keep valuable metals safe and secure. Therefore, if you do not want to pay such kind of fee, you should consider exploring other options.

Third-Party Companies (Private vaults)

There are many third-party metal companies that provide reliable storage and protection services to keep your precious metals safe and secure. Such companies have sufficient space to contain valuable products and ensure maximum security because they specialize in protecting valuable products.

Safe deposit boxes work this way:

A safe deposit box is a long, thin metal box that is kept in a secure area inside a bank or credit union, for those who have never seen one in person. The only method to open a standard box is to simultaneously insert both keys because it has two keyholes. The Vault company has one key, while you keep the other. If you share a box with someone else, like your husband, you each receive a copy of the renter’s key.

This is an extremely safe way to store your precious metals and any other valuable.

No one will know (except the private vault company and you) that you have an account with them, and the vault company will not be able to know how much precious metals you are storing in their boxes. This is extremely good for privacy enthusiasts.

My best pick as an online vault for international customers would be BullionStar. They are based in Singapore, you can purchase any type of precious metals directly from your computer and they will store it for you as long as you like it without any monthly fee. You will also be able to collect it if you visit Singapore, or simply re-sell the precious metals directly from the online dashboard once you have made a profit.

Final words on how to Buy and Store Precious Metals in 2022.

The bottom line is that buying and investing in precious metals is a highly reliable and efficient way of storing and keeping your money value intact against economic recessions.

It provides you with an alternative form of investment other than the traditional US stock market or Bitcoin. Ultimately, you should focus on choosing a reliable investment company and storage plan to fully secure your investment.

Thomas Raynott

Thomas Raynott

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