Welcome To The Precious Metals Investment Guide
Whether you are an investor looking to diversify your portfolio or someone who is looking to convert part of your individual retirement account or 401(k) for better security you have come to the right place. Precious metals have become one of the most popular methods of creating a well protected diversified investment portfolio in what can be at times a world of financial uncertainty. Our aim is to provide you with very best in information on the various types and providers of precious metal investment, to help you make the correct decisions for your financial future.
Investing in Precious Metals V Stocks - Historic Performance
Investing in precious metals has over recent years grown in popularity, as investors use it to stabilize their investments and private individuals look to enhance their personal retirement accounts. However, is precious metals investment the answer to a better financial future? After all metals such as gold and silver have been used for thousands of years as ways of building up wealth. Well, you may be expecting me to say, that it is the answer, but I'm not going to. Like any investment type, be it property, stocks, mutual funds et al., precious metals go down in value as well as up. Precious metals investment is not the holy grail of financial investment, but it does have tremendous potential and adds great value to your financial portfolio and retirement plan if done correctly. That is why I have set up this guide, to help you gather all the information you need to help you make the right decisions when it comes to your precious metals investment.
If you look at the performance history of gold and stocks competing against each other, you will see that in the 20th-century stocks did perform better than gold. However, compare their results since 1999, and you get a different story.
In a 2015 Assets Performance Report, conducted by a London-based precious metals exchange, they reported that from 2000-2015, REIT's (Real Estate Investment Trusts) were up 484% over the period, with gold coming in second with a 340% growth and corporate bonds third at 160%.
Below are two charts, the first chart showing the performance of stocks between 2000-2015. At the start you see the market opened at 11,700 points and then at the beginning of 2015, it was at 17851.04. These figures show that investment over this period would have produced a very healthy return of 52.6%.
The second chart, covering the same period, 2000-2015, relates to the performance of gold. At the start of 2000, gold had a price of $283 an ounce. At the start of 2015, that price had risen to $1206 an ounce, producing a return on investment of 326%
While the ROI on gold investment over the first fifteen years of this century is impressive, it is important to state that historical performance of any investment type is not a guarantee of future returns.
Please note that the content on this website does not constitute financial advice and should not be taken as such. The owner of this site may be paid to recommend Regal Assets or other companies. The content on this website, including any positive reviews of Regal Assets and any other reviews, may not be neutral or independent. It is advisable to always speak to a certified financial advisor before making any investment decision.
Which Precious Metals Are The Best Investment?
The most common are, of course, gold and silver, which have been used for millennia as investments and currency. But there are two additional metals you may want to consider. Platinum and Palladium are growing in popularity as viable precious metals to invest in, and both have seen good ROI over the past few years. Platinum which tends to follow the price of gold has on the odd occasion outperformed gold, hitting the high of $2,252 per ounce in 2008, a price gold has yet to reach.
We look at each metal individually in our investment section, providing you all the relevant information on performance, along with the best companies to purchase from, depending on your requirement.
What is The Best Way To Invest in Gold?
Should you consider investing in gold mines, ETF's or actual physical gold? In the video below, Kevin O'Leary, investor, and known from 'Shark Tank' & 'Dragons Den' explains not only the best way to invest in gold but why it is the only way. He explains why he likes investing in this precious metal, why he has owned it for decades and the single reason behind his decision.
So if you take on board what both Kevin O'Leary and many other influential investors are saying concerning investing in physical gold, what are the options available to you?
Physical Gold Investment Options
Precious Metals Investment is a way of diversifying a portfolio, with the view of protecting it against market volatility and risk. Stocks and precious metals (gold in particular) don't tend to correlate with each other, and therefore they do work well together to create a truly diversified portfolio. In the 70's we saw stocks fall dramatically and as a result, gold rose considerably. in the 80's, and 90's the performance of stocks improved significantly, which saw the price of gold fall. Since 2008, gold has been a steady investment as stocks waver somewhat. And so we see from history that one investment type works well while the other struggles, we see the importance of diversifying our investments.
As we are only talking about investing in physical metals, rather than mines and ETF's, what are the options available?
There are two particular methods of investing in physical metals that we want to discuss.
1. Owning precious metals outright.
2. Adding precious metals to your individual retirement account to create a precious metals IRA
Owning Precious Metals Outright
The first option available when it comes to buying real metals such as gold, silver, etc., is to own it outright. When purchasing gold or silver, you have two options when it comes to storing it. The first is you can keep it at your home; the second is you can have someone store it for you. Either option has both up, and downsides and I talk about those on the investments page, along with recommended brokers.
The second alternative as mentioned is to add precious metals to your individual retirement account.
Why would you want to consider a precious metals IRA? Well as a recent article on investopedia.com rightly stated, Traditional and Roth IRAs invest in stocks or mutual funds and as a result are vulnerable to inflation. Adding gold or other precious metals to your IRA helps to diversify your investment and reduce the risk of loss.
Also due to market changes and vulnerability, Gold IRA's have grown in popularity since 2008. In fact, since 2000 there has been a continual growth of assets put into individual retirement accounts. According to two reports carried out by the Employee Benefit Research Institute, the value of assets held in IRA's has gone from $2.63 trillion in 2000 to $6.97 trillion in 2013. Of that total amount invested, around 4% accounts for non-traditional forms such as investing in gold. (Source: EBRI report 2007, EBRI report 2013)
When Diversifying Your Portfolio How Much Of It Should Be Precious Metals?
When it comes to deciding how much you invest in precious metals and the percentage by which you diversify your portfolio depends on your adversity to risk. It certainly would not be wise to put all your investment eggs in one basket and industry experts advise that a good diverse investment portfolio is one that invests around 5-10% into each investment type. Of course, if you are one who only wants to spread your investments across 3-5 assets, rather than 10-20, then the percentage of investment is going to go up to around 20-35%. So how much you invest in gold is up to you, and I would strongly recommend you speak with your financial advisor before making your final decision on the amount you want to invest.
Who Are The Best Precious Metals Companies To Invest With?
That is a question that you can only answer, once you have decided what type of investment you want to make.
First Option: If you are looking to invest in collectibles, there are a multitude of providers who offer an array of coins, covering a plethora of subjects and coin types for you to invest in.
Second Option: The options narrow if you are considering investing in a precious metals IRA. Whereas buying collectibles can be quite straightforward, setting up your IRA to hold precious metals, requires more work and needs to be done in a certain way, to meet IRS requirements which require you using a Custodian. If you are looking to set up a precious metals IRA then check out our companies page.
Third Option: Finally, if you are looking to invest in physical gold and wish to have it held outside the banking system, the options available for choosing the right company, gets even smaller. If you are looking for physical gold investment, then visit the relevant page here.