Bullion Investing For Beginners
Why are people interested precious metals such as gold, silver and platinum?
The main reason is that they know that the value of precious metals remain stable in the midst of any local or even global economic uncertainties. There are risks involved no doubt but if you wisely put your money in them, they can be a profitable part of your investment portfolio.
There are five main ways in precious metal investing, namely:
COINS & BARS: This is where you actually physically own the real metal. This is the best way to invest in our opinion as if the world markets collapse, you have physical wealth. Coins and bars are the easiest to deal with and give you a certain level of safety and diversity. They are sub-categorized into bullion and numismatics. Gold bullion for example can be pure or almost pure gold while numismatics refers to minted coins such as those that are issued to commemorate certain special occasions. If you are not interested in keeping physical precious metals.
CERTIFICATES: Not recommended as you are putting your trust in the business that holds the physical bullion. Many companies have been uncovered for not having the physical gold or silver to cover the certificates. They also charge storage fees and high commissions on these types of transactions.
MUTUAL FUNDS: Safe, but you lose the hedge aspect if world markets collapse. Mutual funds involving precious metals are the most stable since they are diversified and managed by professional investors. Investing in precious metal stocks is somewhat less stable since you will be investing in a single company only.
STOCKS & MINING COMPANIES: Risky as you are speculating on if the companies will show a profit.
METAL FUTURES: Very risky.