The economy has been on a downturn in recent years, and stock prices are more volatile than they have been in years past. Investors are now making it more of a priority than ever to create an investment portfolio that minimizes volatility, thus minimizing their overall risk. One of the strategies to create a risk-adverse portfolio is to create a diverse portfolio including many non-traditional types of investments. The most common types of investments are stocks and bonds, but more people are beginning to turn toward other types of investments such as precious metals investing.
The article “All You Need to Know About Investing in Precious Metals” from CreditsandFinance.com gives a basic run down of what investing in precious metals entails and the earning potential of this investment. Credits and Finance echoes the sentiments of many investment professionals, arguing that the stock market is more volatile than ever. The article explains why precious metals investing will tend to be more stable than the rest of the market and offers suggestions to maximize the value of a portfolio with an investment in precious metals.
Precious Metals are Resistant to a Volatile Market
Metals such as gold and silver have almost always held an intrinsic value. Gold, silver, and other important metals were highly prized by society, giving them a stable worth and value, making these metals an ideal form of currency. Though precious metals are no longer the basis for currency, they still hold their value well. The historical trend of gold and silver shows a relatively stable value that has increased steadily over time.
The rest of the market can have wildly varying stock prices but the value of precious metals will generally stay fairly stable. Precious metals are resistant to market volatility because of the forces of supply and demand. Since the supply of precious metals is relatively fixed and the demand for them fairly constant, the price is unlikely to change. The creation and circulation of more paper money will lead to problems like inflation, causing volatility in the market, but precious metals will remain largely unaffected by this. The only thing that will have a significant impact on the price of gold silver, and other metals is a change in supply or demand.
How to Maximize Profit Breaking into the Precious Metals Industry
Credits and Finance offers a detailed explanation of the process of investing in precious metals, giving the novice investor a good place to start when looking for advice on precious metals investing. There are also several tips to maximize the value of the investment portfolio. A diverse portfolio with a variety of stocks is highly recommended.
Gold, silver, and other metals are ideal for long term investing because the price is unlikely to change drastically in a short period of time. Precious metals can generally be expected to hold their value well, with the value increasing slightly over time. For this reason, experts recommending holding onto any precious metal investments over the long term, and even passing them onto the next generation of the family.
This article is a must read for someone with little to no knowledge about precious metals investing. It clearly outlines why gold, silver, and other precious metals do not follow the trends of the rest of the stock market. It sites expert testimony and argues why precious metals are a safe long-term investment that should be a significant part of anyone’s investment portfolio.