How To Invest In Precious Metals In 2021

They actually meant it when they said, “Don’t put all your eggs in one basket.” In case of an accident, all the eggs in a basket can crush, and you’ll be left with nothing at all. But, if you divided the eggs into different baskets, you’d still have several basketfuls of eggs after one basket crushes.

Philosophy aside, it’s wise to diversify your investment portfolio. Keeping all your money into a savings account isn’t wise, nor is using all your money to buy company shares. A little here and a little there are the way to go.

How To Invest In Precious Metals In 2021

One alternative investment option that’s quickly gaining ground across the globe is precious metals. Read on to find out how and why you should invest in precious metals in 2021 and beyond.

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4 Ways To Invest In Precious Metals

There are four main ways you can invest in precious metals. These are:

  • Buying physical precious metals
  • Investing in precious metal IRAs
  • Investing in precious metal exchange-traded funds
  • Buying shares of mining companies

1. Buying Physical Precious Metals

You can physically buy precious metals in the form of bars, rounds, or coins. The four leading players in the precious metal industry are gold, silver, platinum, and palladium. Even so, gold has been, is, and will very likely remain the king. It’s the one of the safest stores of value. Next in line is silver, followed by platinum, and then palladium.

You first need to identify a reputable company that sells the precious metal of your choice. Once you embark on searching for one, you’ll realize that there’s quite a number of them out there. Before you settle on any given one:

  • Consult other friends and family members who you know have previously invested in precious metals.
  • Read objective and factual reviews by verified purchasers online. You’ll easily gauge the reputation of the company.
  • Consider the establishment date of the company and the sales volumes. In most cases, the more experienced the company is in selling precious metals, the better for you.
  • Check the skills and qualifications of the company managers so that you avoid dealing with amateurs.

You may want to check out Gainesville Coins and their silver trading service as a starting point.

Once you get the precious metals, you can store them:

  • At your home in a personal safe
  • At a safety deposit box from nearby banks that offer such services
  • At independent coin and precious metal depositories

Note that both banks and bullion depositories charge you some fees for storing your precious metals.

2. Precious Metals IRA

Instead of buying precious metals and storing them as you wish, another great alternative is to open a precious metal individual retirement account (IRA). This works the same as conventional IRAs, only that you have to deposit precious metals instead of cash and other paper assets, like stocks.

You’ll then be required to hold the assets until your retirement, otherwise you risk heavy fines for premature withdrawals.

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3. Precious Metal ETFs (Exchange Traded Funds)

ETFs involve depositing money with a company that buys and stores huge collections of precious metals. Typically, you don’t own the actual gold or silver in the deposits, and you’ll never have physical access to them. What you own is a contract tied to the commodities. If the value of the commodity rises, the value of your contract rises correspondingly.

How To Invest In Precious Metals

You can make huge gains from such investments since ETFs offer leverage. In other words, they allow you to sign contracts several times the value of your real deposits. You can profitably cash out during times of market downturns.

4. Buying Shares

Last but not the least, you may wish to choose one or two publicly-traded precious metal mining companies and buy their shares. This way, you participate in the company’s growth and periodically receive dividends that the company remits to shareholders.

Nowadays, you can buy shares online, but the over-the-counter option still works. Note that if the company underperforms, the value of your shares could go down, and you may end up with less money than what you invested.

The good thing to do is to hold your shares for the long term since the growth of precious metal companies will most likely be in an upward trend in the long term.

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Final Words

Precious metals have, for long, been considered safe haven investments, and this fact isn’t likely to change any time soon. When there’s market turmoil and currencies and stocks crumble, the value of precious metals usually rises. And, that’s the essence of financial security.