A Guide To Investing In Precious Metals

A Guide To Investing In Precious Metals

by Naomi S

Introduction

Everyone is looking for ways to make more money.  While investing in stocks on Wall Street is considered traditional, there is another method that people are considering.  Precious metals are increasing in value, and people have noticed.  Hence, they are looking at ways to invest in them.  The following information will give you tips on how to invest in precious metals, and discuss the benefits and concerns of doing so. 

A Guide To Investing In Precious Metals

Beginner’s Guide To Precious Metals

Most people know that gold and silver have always been valuable.  Indeed, Investopedia says investors have always considered them part of their portfolio.  However, which ones are people looking at?

Gold

As you may expect, gold has always been a popular choice.  It’s durable, malleable, and can conduct heat and electricity.  But, what you may not know is that it is also used in several industries.  Sure, dentists use it for fillings.  But, did you know it’s also used in electronics?

Unlike other metals, gold isn’t valued by supply-and-demand, but by sentiment.  Simply put – “when hoarders feel like selling, the price drops.”  When they want to buy, the price goes up again.  The desire to buy is based on three factors: bank instability, inflation, and wars.

Silver 

On the other hand, silver’s value is based on “the perceived role as a store of value, and its role as an industrial metal.”  Hence, price fluctuations are often more volatile.  It’s price has often been based on

  1. Its role in photography (which has changed since the advent of digital cameras)
  2. The increase of the middle class (which increased desire for appliances and other industrial items that require the metal)
  3. Its use in batteries and superconductors

It should also be noted that silver’s price is affected by application.

Platinum

Platinum tends to be higher priced than gold or silver during routine times based on its rarity.  Other factors for platinum’s price include:

  1. Its industrial use in the automotive and jewelry industry
  2. Auto sales including catalytic converters for cleaner air output
  3. Rare locations of platinum mines in South Africa and Russia

These factors tend to make platinum one of the most volatile precious metals.

Diamonds

As mentioned earlier, the jewelry industry and precious metals often go hand-in-hand.  One of the biggest jewels that is often considered a great investment is the diamond.  In fact, invested correctly, it could even help increase your child’s college fund says Brilliance.com.

According to Fusion Alternative, diamonds are proven to be inflation fighters.  In fact, some financial analysts consider it the next gold or platinum because of the “value and demand in the marketplace.”

There are several reasons why diamonds are considered valuable.  For one thing, you can pass it down from generation-to-generation because of its sentimentality, which is priceless.

Basic Diamond Investment Guide

If you want to start investing in diamonds, you don’t need to buy “the most exquisite or uniquely colored diamond.”  These diamonds don’t have a good resale value, anyway. Rapaport Diamond Report Founder Martin Rapaport suggests getting a diamond within the “D-H color scale and rated with an excellent or very good cut.”  He says to look for a diamond between one and five carats, which are easy to find and resell.

Quality

A diamond’s price is dependant on the quality.  So, make sure it’s certified – preferably by the Gemological Institute of America.  Its nonprofit status, and strict standards, “ensures the quality of the diamond that you are purchasing.”

Get A Classic

The diamond you purchase should be around for a long time.  Loose diamonds should be round or cushion cut.  Rings and bracelets should be put in a “clean and symmetrical setting”, which are considered timeless.

Go Online

Online retailers offer the best flexibility on prices because their overhead is so low.  They also have a wider selection from which to choose.  Experts, however, have expressed concern in buying diamonds because these gems because they are valued by weight, color, cut, and clarity, and buying gold is not as complicated.  Although this is a legitimate concern, there is no doubt that diamonds are a “brilliant addition to your diversified investment portfolio.”

Conclusion

Investing in precious metals has become a popular choice among many.  Volatile banks, and recent wars, have changed the way people invest.  However, precious metals like gold, silver, platinum, and diamonds, will give you a great opportunity to increase your portfolio, and raise money for the future.

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