Gold and other precious metals have long been considered a durable investments. In fact, the price of gold increased 360% in the 30 years between 1990 and 2020.
Precious metals have been around for centuries and are still a popular investment choice. But before you jump into precious metals investing, there are a few things you need to know.
What Are Precious Metals?
Precious Metals are a group of metals that are rare and in high demand for their unique properties. The most common precious metals are gold, silver, platinum, and palladium.
The Do’s Of Precious Metals Investing
Good investing is subjective. That doesn’t mean there aren’t best practices you can follow to increase your chances of success though.
Educate Yourself
One of the most important things you can do is educate yourself about precious metals. What are they? How are they priced? What factors influence their price fluctuations?
You don’t need to be an expert, but gaining a basic understanding will help you make informed decisions when it comes time to purchase precious metals.
Practice Dollar Cost Averaging
Dollar-Cost Averaging refers to the practice of investing a fixed sum of money into security or commodity at fixed intervals, instead of one lump sum investment.
When you buy precious metals in this way, you can help mitigate the risk that comes with price fluctuations.
Keep An Eye On Spot Prices And Research Buy/Sell Trends
In addition to dollar-cost averaging, it’s also important to keep an eye on spot prices.
Spot prices are the current market price of a precious metal. They can be affected by a variety of factors, including geopolitical events, inflation, and supply and demand.
By keeping an eye on spot prices, you can make sure you’re getting the best deal possible.
Ensure Your Investment in Precious Metals is Scalable
This means that you should be able to increase or decrease your investment based on market conditions.
Many experts advise around 10% of your investment portfolio from precious metals should be the upper limit.
The Don’ts of Precious Metal Investing
Just as there are best practices to follow when investing in precious metals, there are also things you should avoid. The top mistakes are listed below.
Over-Investing
It’s important not to put all of your eggs into one basket. This is especially true when it comes to precious metals investing.
By over-investing, you run the risk of losing a large chunk of your investment if the market takes a turn for the worse.
Buying From Disreputable Sellers
When investing in precious metals, it’s important to buy from reputable sellers.
There are many scams out there, and if you buy gold, silver or any other precious metal from a disreputable seller, you run the risk of losing your money entirely.
Failing To Compare Price Information
It’s also important to compare the price of precious metals per ounce from different sellers.
Do your due diligence and make sure you’re getting a good deal.
Get Started With Investing
The information in this post should have given you some good points of consideration to get started with precious metals investing. Keep in mind, this advice is general and if in doubt, contact a professional financial advisor.
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