In a nutshell, the main case for investing in gold and silver naturally is that they guarantee you against the depreciation of your own currency, and/or the housing market in the USA. Gold and silver are reasonably affordable on the same vein of thought. As we all know, when the economy takes a heavy hit, as it has done several times over the past decade, it has been the result of people purchasing gold and silver in order to hold their financial assets intact.
In this regard, when you are debating whether or not to include precious metals in your portfolio, I would have to say “yes”. If you want to make your portfolio more robust, you have to increase your investments in precious metals. There are several ways to do this, but my favorite is investing in ETF’s (exchange traded funds). An ETF is a type of investment vehicle that tracks the movements of major world currencies. So, basically, what you are doing when you invest in gold or silver ETF’s is you are investing in the currency of the countries in which the metals are purchased and sold. This makes investing in gold and silver almost as easy as buying and selling stocks on the over the counter bulletin board in your hometown stock exchange.
You don’t need a very large allocation of cash to start out with, and this makes investing in gold and silver a great small allocation option for new investors. Of course, the beauty of an ETF is that you don’t have to concern yourself with storing the metal, as your portfolio is managed by a brokerage firm. So, you don’t need to worry about an “out of sight, out of mind” mentality. And of course, with any investment, you get to choose who you invest with, so this can also be somewhat of a security net for those of us who aren’t too emotionally attached to our investments.
When most investors get started in their portfolio, they typically invest all of their money in either the traditional form of stocks or mutual funds. Some investors like to focus on just one or two forms of investing, such as gold and silver. If you are someone who prefers to keep things more simple, an ETF can be a great way to accomplish this goal. Even if you just want to diversify your portfolio and increase your exposure to precious metals, an ETF can be a good choice.
Another type of ETF that is becoming popular with smaller investors is a gold bullion coin portfolio. Basically, these types of ETFs are just like gold bullion coins, but the coins are actually backed by ETFs. The advantage to this is that the price of gold itself is usually pretty consistent, which means that there is less risk for the investor. However, many investors don’t like the idea of buying ETFs as their portfolio is generally made up of regular bullion coins, which can have considerable fluctuations. If you like consistency and stability, then perhaps this type of investing is not right for you.
Gold and silver mutual funds are another popular option for smaller investors. These types of funds were designed specifically for investors who prefer to hold gold and silver as a part of their portfolio. Similar to standard mutual funds, these funds use your money to purchase shares in ETFs that are linked to the prices of gold and silver, keeping them steady no matter what the market is doing. Because of this feature, investors don’t have to worry about holding the metal as a part of their portfolio, but instead they invest according to what the market has to offer them.
There are other types of ways to invest in precious metals besides purchasing ETFs, including mining stocks. In recent years, mining stocks have become increasingly popular thanks to the ever increasing demand for gold and silver, as well as the fact that most of today’s largest mines are located in countries with stable economies. Investing in mining stocks allow investors to create a portfolio that will provide a constant and reliable income, even during times when the market is struggling or otherwise struggling to produce cash flows. These types of stocks are considered safe, as well, since most companies producing these types of minerals are state-owned enterprises.
As you can see, there are many different ways to invest in gold and silver. Which one you choose depends entirely on your preferences and investment objectives. The one thing that all investors agree on, however, is the importance of diversification in their portfolio. Diversification is the practice of spreading your risk between various types of investments to minimize the effects of any given market or economic variable. When investing in gold and silver, diversification is even more important because the metal’s prices tend to fluctuate dramatically and unexpectedly. No matter what type of investor you are, though, it’s essential to remember to diversify your portfolio to ensure that your portfolio provides you with a consistently healthy cash flow so that you can enjoy your life and avoid worry and stress.
