It seems that everyone wants to invest in precious metals these days hoping that they will make it rich. That can happen sometimes, and sometimes you do not make a lot of money. There are many things that you need to know before you begin to invest in precious metals. Some are good and some are not so good.
You will want to do some research to find out if investing in gold and other metals would be a good idea for you. You can contact metal-res.com and get their opinions because they know all the pros and cons of buying precious metals. You can get lots of ideas of what kinds of metals are good for you, if any are.
This article will give you some pros and cons of buying precious metals. You should know by the end of the article if this is a good idea for you or not. It is up to you to make sure that you know what you are doing before you do it.
Pros and Cons
1. Pro – They Hold Their Value
Precious metals hold their value as other investments do not do so well. When the economy is going bad, when inflation is getting higher, and when a recession seems inevitable, gold and other precious metals will do well and not lose any value. They may even increase in value while paper stocks begin to lose value. This is when you want to have these precious metals in your investment portfolio.
2. Con – Precious Metals are Expensive to Buy
Precious metals are not inexpensive, they cost a lot to invest in – unless you are thinking about silver which is very inexpensive. Gold, platinum, and palladium, other popular precious metals, can go for nearly two thousand dollars an ounce, if not more. Silver is much cheaper than the others and you can buy it for around two or three dollars per ounce. You can look here to see what the price of precious metals are today:https://www.cnbc.com/quotes/XAU=. This site will help you to see if you are ready to make the investment.
3. Pro – Built-In Scarcity
There is a limit to how much we can mine the earth for precious metals and therefore they are scarce. This, of course, makes the metals more valuable and worthwhile to invest in. After a while, there will be no more metals to buy unless you buy it from a dealer or other investor. This will make your investment worth quite a bit more.
4. Con – Taxes
The worst part of investing in precious metals is that they are taxed at the collectible capital gains rate – about 28%. This is more than eight percent more than other investments such as stocks and bonds. If you keep the precious metals with no intention of ever selling it, you will not have to worry about the taxes. Most people buy the metals with the eventual intention of selling them.
5. Pro –Cannot Be Hacked or Erased
Precious metals are unlike cryptocurrency – they cannot be hacked into or erased. Precious metals are a commodity that cannot be changed – they will always be precious metals, even if you melt them down. They will still be worth what you paid for them if not more.
6. Con – Storage
Gold, silver, platinum, and palladium are hard to store, especially if you want the same dollar amount of silver as the others. You will need to have a safe at home, a storage facility, or a safe deposit box at a bank to store the metals. This not only takes up space, but it will also not be inexpensive.
7. Pro – Private and Confidential
When you buy precious metals, no one will need to know anything about you. When you have other investments, you must tell everything about yourself. You can keep your precious metal investment private and confidential, and no one needs to know about it. You can read here about more rules on keeping your precious metals private and confidential. This site will help you to learn more about it.
8. Con –Liquidity
At this point you cannot buy a house or a car with gold or palladium, you must first liquidate it. This can take some time in many cases, unless you have it in a storage facility that will also let you buy and sell through them. Some states are allowing you to use precious metals to purchase things, but not many at this time. Some people will also barter for the items that you might want, but you need to be careful with that, as well.
9. Pro – No Specialized Knowledge
You do not need to be an expert when you buy precious metals, although that cannot hurt. You can buy whatever you feel is right and it will still be worth the money. You do have to be careful and have a little knowledge, but you do not need to be an expert.
10. Con –No Income or Interest
You do not earn any income from precious metals, and you do not earn any interest on it. The value of the metals may increase over time, but you will not have the comfort of knowing that it is making passive money for you. Precious metals are still a good investment without that, though.
These are a few pros and cons of investing in precious metals, some reasons to invest or not to invest. You should do more research to see if this is the right investment for you, you do not want to take the advice of just one article. You want to speak to professionals who know what they are doing.