Precious metals have been a proven store of wealth for thousands of years. In times of instability, they have been viewed by many as a safe haven, used to preserve wealth and add security to an otherwise uncertain financial future.
Precious metals will always have inherent value because they are tangible and finite resources, uncontrolled by any single government or financial institution. As such, they cannot simply be printed on a government’s whim, like paper currency. This gives precious metals a unique advantage and results in numerous benefits for investors.
Benefits of investing in precious metals
Because precious metals are not subject to the same forces as stocks and other paper assets, diversifying your portfolio with gold and silver can add an additional level of security for your wealth – regardless of the blunders of Washington, Wall Street, and beyond.
Few assets offer you and your family protection from political and economic uncertainty like precious metals. Gold, silver, and other precious metals can help safeguard your wealth from a variety of threats, such as the decline of the U.S. dollar or a stock market crash.
Diversifying your assets is a fundamental investment strategy. Most investors primarily hold paper-backed assets – stocks, bonds, and mutual funds – which in today’s globalized world can fluctuate wildly with each crisis. This is why many people diversify their portfolios with precious metals – to remove the risk of putting all their eggs in one “paper” basket.
Hedge against inflation
As the dollar’s value continues to decline, many Americans use precious metals as a vital hedge against inflation, preserving their purchasing power for the future. In fact, as the Fed prints money in times of economic distress (for example, during the Covid-19 pandemic), the resulting loss in value suffered by the dollar tends to increase the value of metals like gold.
Your investments are your business. Precious metals offer unique privacy not found in many other types of assets. When making a cash purchase, ownership of your precious metals is completely private. Because the metals are in your possession, your portfolio does not need to be accounted for by the government, bank, or financial institution.
Some forms of precious metals, such as gold bullion, are valued almost entirely by their metal content and weight, making them tangible, extremely liquid assets that are uninfluenced by the myriad of other factors that threaten other investment types. In fact, precious metals are among the most liquid assets possible to hold as an investment. And when you buy them for physical possession, you always have access to them.
As finite resources, precious metals have unique growth potential. Gold and silver have provided tremendous returns in the past, and many analysts believe today’s prices are a bargain. For some investors, this makes precious metals an attractive alternative to placing their money in low-yielding bonds or stagnant savings accounts.
The demand for gold is everywhere – nowhere more so than from governments themselves. From 2010 to 2017, national central banks purchased an average of 459.6 tons per year. China’s central bank has recently increased its purchases of gold by a substantial amount — to hedge against the billions of dollars in paper assets it holds but no longer trusts. Even countries such as Russia, Turkey, and Ukraine are taking on more gold. The demand for precious metals will continue to rise, not only from nations and investors but also from the numerous industries that use the metals in their manufacturing every day.
As the demand for precious metals is increasing, supply is decreasing, thus naturally pushing their value higher over time. Around the world, many large deposits and high-grade gold have been discovered – and yet these metals continue to be sought after for use in medicine, machinery, and a myriad of other applications. You don’t have to be an economics whiz to predict what this could mean for the value of gold in the years ahead!
Types of Precious Metals
When people talk of precious metals as investments, they are generally referring to gold, silver, platinum, and palladium – each of which has its own unique benefits and can be purchased for physical possession or placement in a Precious Metals IRA. Here’s a quick background on each metal and its common uses.
Gold has been a highly sought-after symbol of wealth since the beginning of recorded history, often used in jewelry, art, coinage, and many other applications. Because it is malleable, resistant to corrosion, and electrically conductive, gold also has practical uses in numerous industries.
Is gold a good investment for the long term?
A long-term investment in gold, either in an IRA or for physical possession, can offer several benefits – especially with so much uncertainty surrounding the dollar’s decline and the global economy.
Former congressman Ron Paul has said the following about why precious metals are a good investment, especially right now:“I would think people who are in it for the long term, it looks to me like this would be a very good time to buy … I look at gold as insurance, and others might be just at a time where they can start buying their insurance against the dollar fiasco, and I would say this is as good a time as any.”
Like gold, silver has been used for generations in jewelry, tableware, coinage, and numerous other items. Its malleability, heat and electrical conductivity, and unique luster make it practical for a wide variety of industrial, electrical, and manufacturing applications.
Platinum and Palladium
Platinum and palladium, both recognized by their greyish-white luster, are rare precious metals used in many similar applications as gold and silver. Platinum and palladium are both known for their great catalytic properties and are thus used heavily for industrial processes, as well as the manufacturing of jewelry and numerous other items.
Bullion and Numismatic Coins – What’s the difference?
When investing in precious metal coins, you have two primary types to choose from bullion and numismatic. There are unique benefits to both, depending on your goals, but there are some fundamental differences between them:
Bullion coins are valued solely by their precious metals content and weight, making them attractive to investors looking for liquidity. Select bullion coins are also approved for placement in a Precious Metals IRA by the IRS.
Numismatic coins are those whose value is determined not only by their precious metals content but also by their rarity and condition. This makes them attractive to investors who are looking for added growth potential from those factors. Numismatic gold coins are defined as having been minted prior to 1933.
It’s also worth noting a third option popular with investors: Proof coins. While proof coins are also valued partly based on their precious metals content, they are also minted in limited quantities with higher production standards than their bullion counterparts. Therefore, their value is also influenced by their scarcity. Finally, some types of proof coins, such as the Proof American Gold Eagle and the Proof American Silver Eagle, you can place inside a Precious Metals IRA.
Ways to invest in precious metals
Are precious metals a good investment? Let’s look at the two primary ways you can invest in physical metals and the benefits of each:
Buying precious metals for physical possession allows you to store your metals however you choose – at home, in a safe, in a bank deposit box, and so on. You have complete access to your metals at all times and total control over your investment. You simply can’t get that level of peace of mind from most other investment asset types.
Precious Metals IRAs
A Precious Metals IRA combines the benefits of precious metals with the tax benefits of a government-approved retirement account. A variety of coins and bars from around the world are approved for a Precious Metals IRA. When you add metals to an IRA from Birch Gold Group, they are stored safely in a precious metals depository until you decide to take distributions from your account. A variety of other investment types can also be added to a Precious Metals IRA, such as stocks, mutual funds, real estate, mortgages, digital currencies, and others.
Deciding which way to invest should be based on your individual goals and circumstances. Some investors use Precious Metals IRAs for their retirement savings while also keeping additional metals stored at home or in a safe.
Take the first step
Over the years, as governments have fallen and stock markets have tumbled, precious metals have remained a bedrock of stability and security. To learn more about protecting your financial future with investments in gold, silver, platinum, and palladium, take the first step today: Request our free Information Kit or call us toll-free at (800) 355-2116.