How To Buy Gold And Silver
Buying gold is like owning insurance. Every portfolio needs exposure to gold. In 2020, as markets plummeted, investors flocked to gold sending it to historic heights. Over the last twelve months, gold has gained 4%. Investors who were aware of the importance of gold in their portfolio, were able to ride out the storm and come out winners. Yet, investors’ shouldn’t stop at just buying gold. Silver is the perfect metal to buy when betting on economic recovery. You see, silver has extensive industrial uses. What this means is that as the economy reopens, the demand for silver will rise. A fascinating tidbit is that silver has outperformed gold in five of the last six bull markets. So, what you need in your portfolio is gold to act as insurance against any market uncertainty or economic downturn, and silver as a bet on economic recovery. In this article, we will discuss how you can buy gold and silver.
The first thing you need to do is to define what your expectations and goals are. Having clear goals makes it easier for you to develop the right strategy. You can’t determine your strategy without knowing what you want. Here are some ways that your goals impact your investment decision. If, for instance, you are buying gold or silver for the long run, then you should really buy bullion. Bullion bars, bullion coin, bullion rounds. Whatever bullion you can get, that is your friend if you are thinking long-term. Bullion is produced especially for investors. Bullion is produced with an extremely high level of purity. You know it’s bullion because it will be 99.99% pure, which is also referred to as .999 fine.
Some people like the idea of buying collectables and you can do this with gold and silver as well. Collectible coins can be fantastic investments. Invest in rare coins; limited edition or limited mintage coins, such as Krugerrands; antique coins, and numismatic coins. Not only are they great investments, they are also fun hobbies. However, they are pricier than bullion. Another thing to be aware of is that the price of collectible coins is usually more volatile than that of bullion. Volatility, however, can mean that there is a bigger upside with collectibles than there is with bullion. The downside is, of course, bigger than with bullion. SO think carefully about this.
You can buy financial instruments which derive their value from gold or silver. That means buying exchange-traded funds; futures contracts; or other gold-backed derivatives. The biggest selling point of buying paper gold or silver is that you don’t have to store physical gold and it’s extremely convenient to buy and sell. The downside of paper gold or silver is that the frequent trading that you will be tempted to do, will incur you trading fees and various taxes. This is very different from buying physical gold.
FInally, you need to make a budget and determine how much of your savings you are willing to invest in gold or silver. It’s a good idea to schedule purchases, say, on a monthly basis, so you will need to be disciplined in sticking to your budget.