One of the latest crazes of investing is to get into the gold and precious metals market. While it might feel like a phase, it in fact has a long-lasting history. Precious metals are a type of commodity that can fit nicely in an investment portfolio and diversify it.
There are plenty of ways that you can get into this market. For example, you could opt to get into commodities. This might be the physical, raw metal, or more commonly, the bullion. This is when it is shaped into bars.
Stocks for the companies that mine the metals are also a viable option for investing. If you are intrigued, keep reading. I will give some details on how this all works.
Table of Contents
When to Start Investing
This is a question that plagues many of us. The answer is pretty simple: the sooner you start, the better. Even setting aside ten dollars each paycheck is some sort of saving for your future.
Having an emergency fund or savings account that can cushion you is never a bad idea. That is why you should start saving and investing as soon as you can. This way, you have a better sense of security moving forward.
This includes alternative assets. What I will be focusing on today are commodities. Keep in mind that other types are real estate or cryptocurrency, though. Diversifying is never a bad thing.
What are Commodities?
There are a few ways to define them, but typically they are a form of raw material. They are sold in this raw form. Sometimes, they are used in the manufacturing or production of other items as well. You can read up on this topic on this page.
Now, there are a few different categories of them. Of course, Kinross deals with the precious metals. They have operations in Canada, as well as a few other countries including the United States. If you are going to look at a group like them, investigating reviews is a good idea.
Some of the other types include energy or agriculture. The trading of livestock like cattle is considered within this. The same goes for crops like wheat or cotton. Because of the way international trade works, the markets are highly volatile.
Precious metals are one of the few that do not fluctuate as much when you look at them over a long period of time. While they might vary a lot in the day-to-day, historically speaking they have retained their value.
Why Precious Metals?
While the imagery of a gold ring might evoke thoughts about the One Ring from the Lord of the Rings, jewelry fashioned out of this metal does not inspire evil or greed. Instead, it is beautiful – certainly worth the price.
However, if you know anything about self-directed precious metal or gold IRAs (individual retirement arrangements), you know that collectibles like rings or earrings are not permitted. What can you have in them, then, and why should we bother with these materials outside of that?
You can read about it from a site like this one, https://investingingold.com/kinross-gold-review/, where they give a breakdown of a company like Kinross and whether it is trustworthy. Getting all the facts is a big part of choosing to get into this market.
I think the biggest thing to remember here is that while paper money is the most valuable currency currently, it might not last forever. Stockpiling a resource like gold to use as a hedge against inflation is something that many people do. It is good to have something to fall back on.
Throughout the years, we have used these metals in a lot of things. We all know about jewelry, but there are also monuments made of them. Even some car parts are made with palladium or platinum. Silver, gold, platinum, and palladium are the usual metals that are considered “precious” and thus have value.
How Can You Get Involved?
As I said above, there are plenty of ways to do this. One is exchange-traded funds. These are typically called ETFs. You could also get the physical products, or you could invest in stocks for a mining company.
It might be a little hard to figure out where to start, though. There are a lot of resources out there but narrowing them down is tricky. The sheer overload of information is overwhelming for a lot of us.
Hopefully, I can simplify it at least a little bit. You could read something like this article if you want something else concise. One thing to remember is that gold in particular has been used as currency by many cultures. It still is.
In IRA accounts that are self-directed, you can store some gold coins that qualify. The American Eagle is one of them. Unfortunately, not all are allowed, so just make sure you consult a list before you try to add them to your portfolio.
If you decide to get physical bars of gold, silver, platinum, or palladium (though the latter two are much rarer), they will need to be stored. A custodian usually does this. The custodians cannot give financial advice, but they can assist with storing your assets properly.
Overall, one of the best things you can do is research. Learn about the precious metals market. Do not get involved before you have a good understanding of how things work. An educated consumer is a smarter one.
Should We Invest?
The answer to this is not exactly universal, but I would say overall it is a yes. Getting into gold even in small increments can help. Just try something like a few bullions or coins. You could also purchase stock for a mining company.
Depending on what sort of folder you already have, it might be a good idea to consult with a professional. This is because there is a lot that goes into these investments and potentials. Without the right knowledge, things could very easily go wrong.
Just make sure to invest intelligently. That is the most important thing!