Everyone knows that the economy is in a bad place, and many people are looking for ways to invest their money during this time of recession. Investing in gold or silver or another type of precious metal might be an option you consider. There are plenty of good reasons why investing in precious metals can be a smart decision. Here are just a few.
1. Historically An Excellent Safe-Haven Asset
There are many reasons to invest in precious metals. They are historically an excellent safe-haven asset, especially during times of economic, social, or political crisis. Gold has been valued across cultures and civilizations for millennia. It’s nearly impossible to overestimate the importance of gold in human history. For thousands of years, it was used as money all around the world under various different forms and with a variety of properties. In fact, it wasn’t until 1971. that most of the world’s countries stopped using gold as money. Now, online, you can find the best Regal Assets review that can help you buy and sell precious metals. Having professionals by your side offers protection from scams that you may encounter.
2. Offers Anonymity
When times are uncertain, people flock to gold not just because it has an intrinsic value that many other assets don’t have but also because of its safe-haven properties. Gold protects against the risk of fiat currency devaluation and provides a good store of value. You can own physical gold anonymously, with no public records of you holding the metal or any transactions involving it. This anonymity ensures that your investment is secure from both theft and government confiscation. Precious metals are also very liquid investments, which means they’re easy to buy and sell without having a major impact on their market price, meaning that you can quickly obtain cash by selling them when you need it.
3. Liquid Investment, Easy To Buy/Sell
Precious metals are mined across the world in various forms and locations. This ensures that you can diversify your portfolio by investing in a wide range of physical metals with different market characteristics, advantages, and disadvantages. Physical precious metals are also a good way to hedge against the risk of inflation, which makes them an excellent store of value investment — especially if you don’t have access to more traditional forms of financial insurance such as savings accounts and stocks/bonds.
4. Can Diversify Your Portfolio With Physical Metals
Gold is a great performing investment in the long term. Since 2000, gold has risen by more than 500% against the US dollar. From 2002 until June 2011, it rose every single year, with an annualized return of 9%. It dropped sharply in 2008 but quickly recovered and continued rising for another 5 years before starting its most recent downward trend. Gold often drops during recessions but outperforms stocks and other investments during economic crises. The reason for this is that investors look to gold as a safe place to store their money when the market seems unstable, thus pushing up its price.
5. Provides Store Of Value Against Inflation
Silver is one of the most versatile metals on the market. It’s also one of the best-performing investments in terms of percentage gains. Silver has gone up by over 600% since 2000, making it an incredible store of value. Like gold, silver often performs well during recessions and crisis situations but tends to drop when stocks do well and vice versa. This makes silver a good investment for diversifying your portfolio, especially if you invest in other types of precious metals such as platinum or palladium, which often follow different trends than gold and silver do.
6. Limited Supply And Increased Demand In Market
The total amount of gold ever mined is estimated at 171,300 tonnes or 5.9 billion troy ounces. According to the World Gold Council, global mine supplies in 2016 were 3,100 (troy) ounces per day. Meanwhile, central banks around the world have been increasing their gold reserves since 2009 because sovereign debt problems mean that there’s a growing risk that fiat currencies could lose their value, which makes holding physical gold an increasingly popular way to protect against such risks. The US Federal Reserve was one of the last major central banks to stop recording its holdings but finally did so in 2011 when it reported that its bullion stockpile had hit a record 441 million ounces — compared to just 8.4 million ounces of gold held at Fort Knox (the bulk of which is now believed to be gone, having disappeared between 1933 and 1957).
7. Increase In Popularity For Protection Against Fiat Currency Risk
The biggest advantage of silver is its potential for large returns on investment (ROI). According to the Silver Institute, an ounce of silver bought in 2000 was worth $4.53 and had a compounded annual growth rate (CAGR) of 9%. However, it dropped sharply after 2001 and didn’t rise again until 2008, when it began increasing sharply before falling in 2013 following QE3. Since then, however, it has recovered again and has risen almost 50% in value against the dollar — compared to around 30% for gold during the same period.
8. Large ROI Potential
Gold’s limited supply and increasing demand drive prices higher — especially over the long term. Since 1965, the production of gold has increased at a rate of about 2.5% per year as new discoveries have been made and as miners have learned to exploit deposits once considered too difficult to work with. In the past few decades, significantly more efficient means for extracting it from seawater, rock, and other sources have also contributed to this trend by enabling us to reach deposits that were previously inaccessible or not worth even trying to extract from. Meanwhile, population growth around the world continues to increase demand for gold jewelry, which is why you should always buy 24 karat bullion if you’re looking for investment appeal rather than ornamental value. During the last century, the world has consumed around 6.1 billion ounces of gold — but only 160,000 tonnes (5.9 million troy ounces) have ever been mined, according to the World Gold Council’s estimates.
Gold and silver have traditionally been used as a hedge against inflation, an easy way to protect wealth over the long term, and are recognized by the market as safe stores of value. If you’re looking for income or simply want to diversify your portfolio, they are definitely worth considering.