Precious metals, particularly gold and silver, have become the focus of many investors during the global economic crisis caused by the coronavirus pandemic. Prices of silver, gold, and platinum have appreciated considerably since March 2020, a phenomenon known as “flight to safety.” During major periods of financial uncertainty, investors usually flock to assets they consider to be safe, and these include precious metals. Investment advisers often tell their clients that precious metals shouldn’t only be looked at as “flight to safety” assets: they’re also investment commodities that can inject diversity into your portfolio. Here are four ways you can invest in precious metals in 2020, brought to you by First National Bullion and Coin, San Diego’s premier dealer of gold, silver, platinum, and palladium.
There was a time when silver and gold were as good as currency. To a certain extent, this hasn’t changed. Even gold and silver jewelry pieces can be turned into cash by virtue of how much precious metal they contain. Alternatively, you can physically hold coins and bullion. When new gold or silver coins are minted, they have an opportunity to become worth more than their metal weight if they turn into rare collectible items. For the most part, conservative investors tend to be more interested in physically holding precious metals.
Precious metals are commodities, which means they can be traded on futures markets such as the Chicago Mercantile Exchange. With a futures contract, investors agree on delivery of a specific amount of metal at a price to be determined. It should be noted that commodities trading is a highly speculative financial activity that may not be suitable for conservative investors. Futures contracts can also be written by investors who believe prices will come down. This is known as shorting, and it’s more commonly seen during bear market situations.
There are various ways of investing in the mining industry. You can start with financing contracts for exploration, but these aren’t for the faint of heart. Modern mining companies prefer to fund their operations based on the value of their stock, which means you can purchase shares on open markets such as the Nasdaq and the New York Stock Exchange. It should be noted that mining is a speculative activity, thus making mining company stocks risky.
Precious Metals ETFs
Exchange-traded funds (ETFs) have mostly replaced mutual funds, and they provide the easiest way for investors to add gold and silver to their portfolios. Some ETFs focus on just one metal, while others manage a mix of holdings. ETFs can be bought and sold just like equity securities, and their expense ratios are generally very low. The simplest ETF instruments are pegged to the price of gold, thus making them easier to track and understand.
If you’re building an investment portfolio and looking for the best place to purchase San Diego silver bars, gold coins, and other forms of precious metals, reach out to the trustworthy professionals at First National Bullion. We can answer all your questions and help you find all the information you need on how precious metals can be great investments. Give one of our experienced dealers a call today at 858-666-6570.
The statements made in this blog are opinions, and past performance is not indicative of future returns. Precious metals, like all investments, carry risk. Precious metals and coins may appreciate, depreciate, or stay the same in cash value depending on a variety of factors. First National Bullion does not guarantee, and its website and employees make no representation, that any metals for sale will appreciate sufficiently to earn the customers a profit. The decision to buy, sell, or borrow precious metals and which precious metals to purchase, borrow, or sell are made at the customer’s sole discretion.