The current high inflation rates have financial experts predicting that a major recession is on its way. While the rich won't feel the pinch too much, small-scale investors have started to explore ways to protect the wealth that they have worked so hard to accumulate.
Investing in precious metals offers a promising solution. However, making the transition to a new asset class isn't always easy. In this guide, we answer the frequently asked questions regarding gold and silver investments so that people can start hedging their wealth against inflation.
What Is the Best Way to Invest in Precious Metals?
The two primary methods of investing in precious metals are through gold exchange-traded funds (ETFs) and purchasing physical metals like bullion coins and bars from a precious metals exchange. Gold ETFs track the price of the gold, with 1 unit in a gold exchange-traded fund being equal to 1 gram of gold. However, with ETFs, you don't have the rights to the actual metal and cannot take delivery of the metal when you want to.
Furthermore, Gold exchange-traded funds are subject to counterparty risk under which the party can fail to honor their contractual obligations and default.
At the height of the global financial crisis in 2008, people witnessed how quickly financial institutions could turn their back on them. This is why the majority of precious metal investors choose to invest in physical coins and bars as they have complete right over the asset. This decreases their counterparty risk and gives them more control over their financial destiny.
How Can I Store My Precious Metals?
You can choose to store them in your private vault in your home, which is outside the financial system. Choose a safe that protects your gold and silver from natural elements and hazards, especially if you live in a place that is prone to natural disasters. For example, California has seen a lot of wildfires recently that have burned homes to the ground and destroyed everything within them. In contrast, New York has seen massive flooding that has devastated a lot of homes. This is why you need to purchase a safe that is both waterproof and fireproof.
Buy a safe that is sturdy and can meet the capacity needs of your investment. Nowadays, there are automated safe deposit lockers that have advanced identification processes that reduce the need for human vigilance and enhance the security level. Consider getting bullion insurance to add an extra layer of protection to your assets.
If you feel like storing at home is too inconvenient or the bullion insurance premium is too much, then store at a third-party storage firm. These commercial depositories are insured and have round-the-clock security guarding your precious metals. Your precious metal investment dealer will deliver your assets to a commercial depository you like so you don't have to lose your sleep over a burglary happening at your place.
How Liquid Are My Physical Metals?
One myth about precious metals is that they are not very liquid—which is not true. If you can find an investment dealer that has investor-friendly terms and conditions, you can get the proceeds in a few days. While some dealers charge investors a buyback fee, reputed investment companies like Orion Metals Exchange have a zero buyback clause.
What to Look for in an Investment Dealer?
It's important to purchase from a precious metal exchange that has a track record of ensuring customer satisfaction. Select a company that sells products certified by organizations such as the Numismatic Guaranty Company and Professional Coin Grading Service.
This will ensure you don't buy counterfeit precious metals. Look at reviews from consumer review sites such as Trustpilot and ConsumerAffairs.com to see how the company has dealt with its past customers.
Invest in Precious Metals Today
On the lookout for a full-service precious metals investment dealer? Orion Metal Exchange offers high-quality precious metals at the lowest price possible. They provide gold, silver, palladium, platinum bullion, and coins in America that help you avoid putting your financial destiny in the hands of financial institutions.
Check out their reviews on Trustpilot to learn what their clients have to say about their service. The company also helps with precious metal storage companies as well as precious metals IRAs. Learn about their services by visiting their website today.
About the Author
James Y. is a former wall street analyst who decided to invest his life's savings in precious metals after seeing the devastation brought about by the crash of 2008. In his free time, he likes to write about how people can develop generational wealth and live the life they dream of.
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