In our modern age, we live in a world of paper currency and plastic credit cards. Not many people think about the possibility of investing in gold and silver. In this blog we’ll take a closer look at investing in precious metals.
Precious Metals: Actual Value
Think about this for a moment: what actual value does a 5-dollar bill in your wallet have? Other than the value other people agree upon, that piece of cotton-based paper isn’t technically worth anything, particularly in times of crisis.
Now you might say that times of crisis aren’t on the horizon, but it’s difficult to know exactly when a financial crisis could occur.
Since the U. S. Government abandoned the gold standard in 1971, gold and other precious metals draw their value from basic demand. Unlike paper money, gold and silver have uses other than money.
Both metals have countless industrial uses, including electric and thermal conductors, reflectors, and coatings. And that’s not even covering their aesthetic purposes and value.
Precious metals like silver and gold also have value because of their rarity. Today’s silver supply is at a record low, so its demand (and thus its value) continues to increase.
Why Gold and Silver Present a Safe Investment
Most investments factor in a certain amount of risk, which usually goes along with a certain amount of earning potential. Investing in stocks, for example, illustrates this principle. The more you invest in a
company’s stocks, the more you could gain-or lose.
Gold presents a safe investment for several reasons. Unlike stock investments, gold presents a completely anonymous way to increase wealth. And despite the movement of stocks on the market, your gold collection remains the same.
Silver’s rarity, demand, and versatility ensure its current and future value. If any catastrophe should ever occur, gold and silver will always provide you with a valuable resource to fall back on.
Buying Gold and Silver
Below are some basic rules to follow as you look to invest in precious metals:
1. Only Buy Products You Understand
This rule basically means that you should avoid buying gold and silver coins unless you are well versed in the product. Rare and exotic coinage might seem appealing, but you’ll feel pretty foolish if you traded far more than what that coin was worth.
2. Buy From Trusted Dealers
Don’t confuse this rule with “buy from only expensive dealers.” Do everything possible to research and investigate different dealers before you choose someone. Once you find an owner you trust, you’ll feel more confident about your gold and silver purchases.
3. Silver First, Start Small
Remember that any gold or silver you buy has more value if you can liquidate, trade, or barter it easily. Investing in large gold bars might seem appealing, but it becomes more of a hindrance if you ever need to exchange or liquidate your gold investment.
Start with small purchases of silver, and then small pieces of gold bullion from there. A slow, safe start ensures that you don’t make any rash decisions and have freedom to exchange them in the future.
4. Don’t Fall Prey to Myths
Do independent research to protect yourself from myths and schemes. Remember, your money is your own, and you have the right to decide how to invest it. Don’t let numismatic sellers push you around or pressure you into a purchase you’re not comfortable with.
5. Bullion Is Best
Fancy and rare coins are fun, but they often yield a poor exchange rate. If you want to collect gold and silver coins for their entertainment and aesthetic value, that’s great. But trust in bullion to provide a safe investment now and in the future.
If you follow the above rules, you’ll enjoy safe and secure investments in precious metal. Contact a
trusted local gold and silver exchanger to get started today.