Can Precious Metals Help Your Portfolio? Absolutely!
When creating an investment portfolio, many people start with stocks. However, novice investors soon realize that being 100% in stocks can be a problem during a meltdown on the equities market. That’s when new investors begin to look at other investments. This is also when newer investors begin to take a look at precious metals as a possible addition to their portfolio. However, are precious metals really a good investment? Some investors that are still uncertain, turn to Allegiance Gold. The executives at Allegiance Gold have been educating their clients on the importance of precious metals and how they positively affect a retirement or financial portfolio. After reading this article, call 844-790-9191 to learn more and receive a FREE Gold IRA Guide.
What are Precious Metals?
Precious metals are metals that are used primarily for investment purposes due to their rarity and desire as a store of value. The two more popular precious metals are gold and silver. Other precious metals include platinum and palladium. Precious metals are available as physical holdings including coins and bullions. Investors can also gain exposure to precious metals via precious metal exchange-traded funds or ETFs.
5 Reasons Why Precious Metals Are a Good Investment
There are a number of reasons why you will want to consider adding gold and silver to your investment portfolio. Here’s a look at five compelling reasons to consider an investment in precious metals.
1). Holds Purchasing Power
For thousands of years, precious metals have held their value. For instance, you could purchase farmland in the ancient Roman Empire for a couple of ounces of gold. Today, you can also purchase a couple of acres of farmland – just about anywhere in the world – for a couple of ounces of gold. Compare that to fiat currencies which tend to lose value each year and become worthless after a couple of generations. You can always count on precious metals to provide you with purchasing power over the long term.
2). Not Correlated with Stocks
If you have a portfolio heavy with stocks, then you know how volatile your investments can be when there are market meltdowns. Historically, gold and silver are not correlated with the stock market. That means that your investment in gold and silver will likely hold their value even if the market crashes. Adding precious metals can help smooth out your returns over the long run.
3). Can Be Privately Held
Unlike stocks, you can purchase gold and silver from a private seller and take physical possession of the asset. From there, you can store your gold and silver privately. For transactions under $600, you do not have to report gold and silver sales to the United States government. This type of private possession and ownership is simply not available with many other types of investment assets.
4). Accepted as an Alternate Form of Currency
Around the world, you will likely find someone who will accept gold and silver as a form of currency. Whether you are in the United States, Russia, Africa, or China, you will be able to exchange gold and silver for goods and services. Compare that with fiat currencies which are not always accepted in certain parts of the world. For instance, you may run into trouble if you try to pay for groceries – in the United States – with the Chinese Yaun.
5). Acts As an Inflation Hedge
Finally, gold and silver can act as an amazing hedge against inflation. So what exactly is inflation? When you have inflation, the price of goods and services begins to rise. In many cases, inflation can spiral out of control and begin to devalue people’s purchasing power. During inflationary times, gold and silver tend to outperform other assets. One great example is the outperformance of gold during the inflationary period of the 1970s. In 1970, the price of gold was just $35 per ounce. By 1980, the price of gold soared to $585 per ounce. During that same period of time, stocks barely registered any sort of game.
How to Get Started Investing in Precious Metals
If you would like to get started investing in precious metals, you may want to consider an investment in silver coins which have a lower cost versus gold. As you raise your precious metal allocation, then you will want to add gold coins to your portfolio. If you are not sure of where to store your precious metals, Allegiance Gold can help direct you in the right direction. Make sure to call or fill out the form below to learn more on receiving a FREE Gold IRA Guide.