The economy has been rather volatile in the last handful of years. With constant changes, the COVID-19 pandemic and global shutdowns, the state of the global economy has seemed less stable than it has in decades. And during times like these many investors, particularly those nearing retirement who won’t have time to make up losses in their portfolio, begin to wonder if they should move their investments into precious metals. There are advantages and disadvantages to this, of course, which you may not know about yourself. Here is a quick look at whether precious metals are a good investment!
Precious Metals, Explained
Precious metals are the metals that are most rare and consequently highest valued in the world. Gold, silver, and platinum are among the most known precious metals. These were the metals that served as the first and longest lasting currency units in the world. Today, gold, silver, and platinum serve both vanity purposes in jewelry, and as industrial resources used in cars, electronics, and batteries. This can cause all sorts of price fluctuations, particularly silver and platinum, because investment is not the only source of price influence exerted on their prices.
When You Should Have Precious Metals
The best time to own precious metals is during economic downturns and periods of high inflation. The great thing about precious metals is that you cannot just make more of it, in the same way that governments can print more money. This makes precious metals relatively inflation proof, as they are a stable commodity. Gold typically rises during economic downturns and during times of inflation. This makes gold and other precious metals a great addition to your portfolio to mitigate risk and make your portfolio less volatile, as they have intrinsic value in the way that stocks or bonds do not.
Do Precious Metals Belong in Your Portfolio?
Well, the short answer is probably yes. Almost certainty you should have precious metals in your portfolio, especially as you are nearing retirement, because they are very stable investments that see less price fluctuation and can help protect your other investments from economic downturns by hedging your bets. You should think about buying precious metals when the economy is doing well, and inflation is low. This will allow you to buy low and see improvements when the economy takes a turn and gold consequently rises.
Precious metals are a great investment for most investors everywhere. Precious metals have been a medium of exchange and investment since they were first discovered by humans and maintain their value to this day. Consider diversifying your portfolio with some precious metals.
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