More and more dollars are getting printed, and investors are getting worried. You can’t put all of your trust in a currency that can be printed at will. The government has a say in when this can happen, and that’s not a safe way to keep your savings. Let’s see about the basics of gold investment.
That’s why most investors turn to stocks, bonds, real estate, and most recently, gold. Yes, you read that right. Gold is making a comeback. After a couple of decades of stagnation, plenty of investors are looking at precious metals as a way to keep their funds safe and secure. Click on this link to read more.
A lot of people are surprised by this, but there’s nothing surprising about it. Throughout history, we’ve always turned to gold when times get hard. That’s been the story of the last two thousand years. Plus, when there’s a lot of uncertainty in the markets, the prices of precious metals tend to skyrocket.
That’s especially true when inflation happens. Here’s one obvious truth. There’s a limited amount of gold on the planet, and there’s an unlimited amount of money that can be printed. This statement alone should make you think about your investments, especially the ones that are long-term.
Plenty of experts are putting a chunk of their portfolios in coins and bullions since that’s a hedge against the rising rates of inflation that are getting higher every year. Now, it’s crucial that you have a solid understanding of it before putting your money into it.
As with any investment, there’s a chance that you might lose a part of your money. However, that’s a risk that every financially educated person needs to take. Here are some of the things that you should know.
Stocks are not the same things as metals
Through the power of advertising, you might have been targeted with ads that say you can buy gold stocks. That’s true, but that only gives you a slight exposure to the world of precious metals. This is appealing to people that want to have equities instead of the real deal.
Remember, when you’re buying stocks, you’re getting a share of a mining company, and you’re not buying the metal. Let’s look at an example from recent times. During the pandemic, the entire market crashed. Prices plummeted, and the months of March and April were devastating for the entire world. This is also true about the companies that mine precious metals.
If you had stocks in them, you’d lose money. However, the price of platinum, silver and other metals stayed the same and increased. You should always consider these options, especially when you’re trying to create a hedge against the dollar. These two have an inverse connection.
That means that their prices fluctuate in the opposite direction. When the buying power of the dollar increases, the price of gold decreases. The opposite situation is also true. Of course, you should also have in mind that the buying power of everything is subject to change.
Every medium of exchange is subjected to perceived value. If more and more people think that something has value, then the market shifts in that direction. Just look at everything that happened with Bitcoin this last year. A lot more people got exposed to the world of cryptocurrencies, and as a result, the price of a single Bitcoin crossed over 64 000 dollars.
Be careful with paper certificates
The internet is a place where everything can be faked, so you need to be extra careful with your credit card. You need to understand that if you buy a paper certificate without seeing or holding the gold, you might be getting scammed.
If the only evidence you have is a piece of paper that states it’s a certificate from a new online company, you’ve definitely given your money to the wrong vendor. Now, we’re living in times of economic turmoil. This means that people are getting desperate, and they’re thinking of ways in which they can make a quick buck.
You need to keep an eye out for anyone that’s selling something that’s too good to be true. Always remember to check the broker and see if they can really be trusted. There have been loads of cases where a company has sold the same paper document to multiple people.
If that happens, the way you’ll realize it is when another economic turmoil happens, and you want to take out your money, just to realize that they don’t have it.
Keeping everything in a secure location
Buying physical assets means that you need to find a secure location where to keep them. This is especially true if you have a large number of coins or bullion. You can get more information about Augusta Precious Metals here. Depending on the weight and the amount, you would need a robust and dependable safe.
However, that would mean that it would be kept at your property which could be broken into. The best choice is to get a deposit box in a bank or a union where it’s insured.
The difference between coins and bullion
Having coins is always better than stacking up bullion because of the rarity. Sure, the coin might have a bit less content and purity, but the most important thing is a rarity. When you have something that other people are looking for, you can set the price as high as you want.
This means that even if the markets go down, there will still be collectors that would want your coins. The most important thing here is to look for certified coins from independent contractors. Of course, this needs to coincide with your long-term goal.
Are you looking for a hedge against the dollar, or are you looking to profit by trading collectibles and precious metals? Whatever your goals are, the smartest thing to do is diversify. Don’t put your entire portfolio in one place.
As the saying goes, you shouldn’t put all of your eggs in one basket. The more stable sources of income you have, the better it is in the long run. Always remember to talk to a financial advisor beforehand.