Should I Buy Precious Metals? 5 Questions to ask Yourself First
Why should you buy precious metals? For centuries, people have used gold and silver as money. Today, in the free market, investors still see these precious metals as an asset to protect their wealth and to diversify their investment portfolio. Before you begin investing in precious metals, it’s important to ask the right questions.
5 Questions to Ask Before You Buy Precious Metals
- Why Invest in Precious Metals?
- Should I Invest in Bars or Coins?
- When to Buy Precious Metals?
- Where to Buy Precious Metals?
- How to Buy Precious Metals?
Let’s take a closer look at some of the answers:
1. Why Invest in Precious Metals?
Smart investors buy precious metals as a hedge against financial uncertainty. While most people think of the 1930’s Great Depression as an anomaly, this is far from true. After World War I, the German Weimar Republic experienced hyperinflation. Then, after World War II, the Hungarian currency collapsed.
During the past century, hyperinflation has occurred often. In Chile, it occurred from 1971 to 1981. In Argentina, it occurred from 1975 to 1992. And in Peru, it occurred from 1988 to 1991. Hyperinflation has impacted Angola, Yugoslavia, Belarus, and Zimbabwe. In Angola, it happened from 1991 to 1999; in Yugoslavia, from 1971 to 1981; Belarus, from 1994 to 2002; and in Zimbabwe, from 2000 to 2009.
There is an opportunity cost to investing in precious metals alone. It’s a good idea to invest in other assets and try to build a balanced portfolio for your retirement account. Often, predicted financial issues never happen. A classic example of how wildly inaccurate financial forecasting can be is epitomized in the story of billionaire Ray Dalio. In the 1980s, Ray Dalio believed global ruin was inevitable. His deep analysis of the world economy suggested a collapse right before the bull market. Fortunately, he was wrong. This story is so interesting because Dalio is no ordinary person. He is one of the best investors in the world and ranked among the 100th wealthiest people. At the end of the day, not even experts can predict the future.
2. Should I Invest in Bars or Coins?
Gold and silver are often purchased in the form of bullion, which is the weight of gold or silver before it’s coined. Both gold and silver have attractive features. But of the two, gold is the better investment. Gold is valuable because it has a much bigger liquid market. This is primarily because of a high demand for jewelry investments. What’s more, the price of gold is also far less volatile than the price of silver.
Silver, by comparison, is far more speculative and valued for its industrial uses. What makes silver attractive to small investors is that it’s far cheaper to buy. Silver is still affordable during economic downturns. Still, there’s no reason to choose between them. You can buy both gold and silver because each offers unique advantages.
Most investors will do well with bullion coins. Sovereign coins are easy to store, easy to recognize, easy to trade, and easy to sell at a higher premium. Although you can always buy a small bullion bar, like a 1-ounce bar, these are more difficult to sell, and the cost of the transaction is also higher.
Of course, bullion bars also have their place, too. Usually purchased by institutional buyers, they offer a higher quantity at lower premiums. Large buyers also don’t have any problems with safe storage.
If you are a small investor, you are better off buying gold and silver coins if you plan to take direct delivery of your purchase. A gold or silver coin with international recognition is a tangible asset that is easy to buy or sell. Moreover, coins come in a variety of options to suit your budget.
Here are some of the best gold and silver coins to buy:
Gold coins:
- Gold American Eagle
- Gold Buffalo
- Gold Canadian Maple Leaf
- Gold Krugerrand
- British Britannia
Silver coins:
- Silver Canadian Maple Leaf
- Silver American Eagle
- Morgan Silver Dollar
- APMEX 1 oz. Fine Silver Round
- Austrian Silver Philharmonics
3. When to Buy Precious Metals?
Many people who want to invest in precious metals ask financial institutions and precious metal dealers questions like: “Is now a good time to buy precious metals?” or “Should I buy precious metals now or later?
Although these might seem reasonable questions to ask, it’s impossible to answer them with any accuracy because the idea of timing the markets is something of an illusion. While we can see the past, we can’t see the future.
Although statisticians do their best to peer into the future by reviewing past market patterns and trends, these are merely educated guesses. Precious metal prices fluctuate due to diverse economic market conditions.
In the final analysis, it’s difficult to decide when to buy gold and when to buy silver. There’s no right answer to the question, “Is it a good time to buy precious metals?” Instead of focusing on timing, then, think of gold and silver purchases as a long-term investment. Over the past decade, gold has done better than most mutual funds. While all markets experience steep dips, gold and silver rise in value over the long haul. In fact, if you are planning on leaving a financial legacy, consider leaving gold as your primary asset for your family rather than money, property, or mutual funds.
4. Where to Buy Precious Metals?
Where is the best place to buy precious metals? If you’re interested in buying precious metals with some extra money you have available, you might wonder: “Where can I buy precious metals?” After you figure out the best precious metals to buy, you need to figure out where to buy precious metals.
Buying from a physical business may not be as safe as you think. It’s comforting to speak to a dealer face-to-face who is knowledgeable about numismatics. But this is often a mistake because an unscrupulous dealer may take advantage of your lack of knowledge. They may sell you bars or coins that have a high premium but won’t retain their value over a long time. Consequently, the best way is to buy precious metals is online.
There are many reasons why it’s best to buy precious metals online:
- Many legal checks and balances to keep your transaction safe
- Options on products.
- More payment methods
- Selections for every budget
- Accurate and relevant product information
- Proof of purchase and delivery
Dealers who buy and sell precious metals are eager to win consumers trust because they know that the FTC can launch a quick investigation should they do something illegal. A precious metal licensee could lose their business if they exorbitantly overcharge or fail to deliver as promised.
Many websites allow you to buy and sell precious metals online through many forms of legal tender, including allowing you to buy precious metals with bitcoin. Of course, you will still need to do your research on the best place to buy precious metals online.
Treasury Vault provides customers with affordable gold and silver. We offer the World’s First Gold Card and offer a secure solution to buy fine rounds, bars, and fractionals. In silver, we offer 1/10th oz. silver fractionals, as well as fine rounds, bars, and other options.
5. How to Buy Precious Metals?
After you’ve figured out where to buy precious metals, you then need to figure out how to buy precious metals. The best tip is to always do your own research before you buy online from a reputable website.
Here are 5 helpful Google searches which can help you better understand buying and selling in the precious metals market:
- How to buy precious metals online?
- Is silver for sale at a good price?
- Is gold for sale at a good price?
- What is the cheapest way to buy precious metals?
- How should I store my precious metals?
When buying precious metals, you should not take physical possession of your gold and silver. Storing them in your home, for instance, is a risk. Besides the risk of a burglary, you risk the loss of your wealth through a natural disaster. Instead, store your bullion in a secure vault. It’s also much easier to keep the chain of custody when you store your precious metals in a vault. Fortunately, many dealers now offer a buy-and-store program for their customers and this mitigates the risks of taking physical delivery.
Besides buying physical bullion bars and coins, another option is to buy gold or silver exchange-traded funds (ETFs). The main advantage of purchasing ETFs is that they are the easiest and most convenient way of acquiring gold or silver. One drawback is that you do not own the metal and don’t have any claims on the gold or silver within a fund. This means that you cannot take delivery of any precious metal should you need it. You’re also relying on a third-party to stay in business and deliver on their obligations.
Conversely, when you buy physical gold and silver, you own these precious metals and can store them outside any financial system. All things considered, then, buying and storing physical gold is a better choice than buying gold or silver ETFs.
Purchasing Precious Medals
Should you buy precious metals? Frankly, there are no downsides to investing in gold or silver. Many seasoned investors refer to precious metals as real money because they understand that gold and silver have historically always retained their value regardless of what happened to their paper money.
Today, many investors include precious metals in their portfolio. They buy gold or silver because they understand how important diversification is in any financial system. Naturally, this type of investment is something you should only do after much careful thought. You must first make some important decisions. Do you want to buy gold or silver– or both? Do you want to buy bars, or do you want to buy coins? If you want to buy coins, do you want to buy limited edition coins?
It’s important to research the many aspects of investing in precious metals. You have to understand the different forms of bullion available, find a precious metal dealer, and make a careful decision about secure storage. You also need to understand the precious metals markets in order to evaluate the best bullion options based on the spot price, premiums, and other factors. By asking the right questions, you’ll be able to make the best decisions about purchasing precious metals as you grow your investment portfolio.