A Critique to Buying Precious Metals
Many people want to buy precious metals such as gold and silver. They want to do this because these metals are said to be a great hedge against inflation and other economic downturns. These are things that they have been told.
There are many companies that buy and sell precious metals, especially gold and silver. Many of them can find the metals that you are looking for. You can do research to find the right company for you.
One way that you can do research is to read the reviews of the different companies. You can look up a company review to see what people are thinking about them. You can then go from there to see if they are the company that you need to do business with.
This article will tell you more about the pros and cons of buying precious metals. It will help you to decide if this is the way for you to invest in your future. You can also do more research to find the information that you need.
Pros of Buying Precious Metals
Tangible Assets
One of the biggest reasons to buy them is that they are tangible assets. You can hold them in your hand – they are not just something on a computer screen that says that you own them. They cannot be destroyed easily like paper assets.
They are also not like commodities because you do not need to take care of them such as feeding and other maintenance. You can just hold them in your safe at home or safe deposit box at the bank. There is nothing that you need to do to make sure that it keeps its value.
Store of Value
They are also a store of value for you. Many advisors will tell you that stocks will outperform precious metals, but this just is not true. Gold, for example, has outperformed stocks for more than twenty years. See here for more information on that.
Many people think that these will just hold their value, but you can actually profit from them. When investors see that their stocks are not doing very well, they begin to invest in gold and silver. This helps drive up the profits for these.
Cannot Be Hacked or Erased
Many forms of investments today are based on some digital form. These assets can be lost by being hacked or having them erased. You cannot say that with gold and silver, they cannot be destroyed that easily.
You will not lose these by a surge of electricity or loss of internet. They will survive even the most catastrophic events. You will have them even after these types of events.
Are Value Dense
You can store them in a small space compared to other assets, especially gold. You can hold a lot of gold in the palm of your hand, around $50,000. Silver is a little more difficult for that because it is less expensive.
Other metals are similar to gold in that you can store a lot in a small space. Platinum and palladium are some of those that you can do this with. They are not as popular as gold but are still great sources of value.
They Are Private and Confidential
You do not need to have any record that you are buying precious metals, especially if you buy them in small amounts. You do not have to give any personal information when you are buying them. This keeps them private and confidential compared to other assets that you can buy.
With other assets, you need to give out personal information when you buy them. This leaves a record of your investments. If you do not want to leave a record of what you are buying, stick to physical metals.
You Do Not Need Any Specialized Knowledge
Unlike other collectibles that you can buy such as rare paintings or diamonds, you do not need to have any specialized knowledge when it comes to buying metals. You can just go to a gold dealer and pick out what you like in the amount that you would like. The dealer can help you if you need it, but you can do it on your own, as well.
You could buy coins, bullion, bars, or rounds and choose just what you like for the amount of money that you want to spend. You can buy just on the look of the coins or the amount of money you want to spend. You do not need to have any specialized knowledge.
They Are Portable
You can carry these metals with you anywhere in the world. There are no restrictions on what you can carry or how much. They are portable, unlike some other assets that you can buy.
Gold coins and bullion are easier to transport than silver, but you can still transport both easily. You just will not be able to take as much silver with you as easily. You could also take platinum and palladium coins and bars with you.
Ideal for Heirs
Since they hold their value over time and because they are tangible assets, they make a great asset to pass down to your heirs. Your heirs will appreciate your foresight in buying these assets. They will have something tangible that has value.
Cons for Buying Precious Metals
Cost
The cost of precious metals can be a drawback for people to buy them. Gold is nearly two thousand dollars per ounce: https://www.apmex.com/gold-price. Platinum and palladium can be just as much, if not more in some cases. Silver is much less expensive, but still has an expense to it.
Along with the cost of buying these metals, you must also pay commission fees most of the time. Commissions are cheaper than if you would buy real estate, but they are more expensive than other assets. This is a cost that you will have to figure in to buying your physical metals.
Storage
Precious metals can be difficult to store at times. If you have a lot of them, you will probably need to pay someone to store them. This is also true if you have them in a precious metals IRA – you cannot store them on your own.
Even if you just store your gold in your safe deposit box at the bank, you will incur a fee for that box. There are fees to store it almost anywhere unless you want to store it in your home. Even then, you will have to spend extra money to buy a safe for your home.
Liquidity
These metals are not especially liquid – it is difficult to liquidate them in some ways. You cannot take a bar of gold to the auto dealership and buy a car; you will need to liquidate it before you do that. You would need to go to a gold dealer and sell it to get your money.
Conclusion
There are many pros and cons to buying precious metals as investments for your retirement. The pros can outweigh the cons, so they are still worth buying. These assets are tangible, and you can pass them down to your heirs if you would like.
There are some cons that can make buying them difficult. For instance, they can be extremely expensive and could be more expensive when you add commission fees. They are still worth the money because they can help you in times of economic turmoil.
