Cons of investing in platinum The price of platinum is more volatile than gold or silver, making it less effective in softening the profitability of your portfolio. There are only a few investment products directly related to platinum; many more are available with extensive exposure to commodities. You've probably heard time and time again that it's wise to invest in precious metals such as gold and silver, and even consider a Gold IRA guide. However, the truth is that the precious metal is not a simple, made-for-all investment.
Many variables must be taken into account at the time of purchase. However, investing in gold and other precious metals, and particularly in physical precious metals, involves risks, including the risk of loss. While gold is often considered a safe investment, gold and other metals are not immune to price drops. Learn about the risks associated with marketing these types of products.
A futures contract is an agreement to buy or sell a publicly traded asset in the future. The contract specifies when the seller will deliver the asset and what the price will be. Keep in mind that commodity prices are volatile and that futures trading is generally considered a high-risk activity that is not for beginning investors or even for many experienced investors. Most investors are familiar with traditional assets, such as stocks, mutual funds, bonds and exchange-traded funds (ETFs).
However, if you're aiming to diversify, you may want to look into other investments. Platinum and gold are two precious metals and non-traditional assets that investors can use for financial benefits, such as hedging against inflation. Each has unique advantages and disadvantages that make them more suitable for specific types of investors. If you want to invest, you can buy physical gold bars at a refinery such as Manhattan Gold & Silver.
Storage costs, price fluctuations and the use of investor loans to finance the purchase of metal bars, ingots or coins are just some of the risks associated with investing in physical precious metals. Investing in physical precious metals carries the risk of running into high-pressure sales tactics and even fraud. A prominent advocate for investing in gold is Kevin O' Leary, a successful Canadian businessman best known for his appearances on Shark Tank. You can pay a portion of the cost to invest in the precious metal in cash, but then pay the rest of the investment with margin.
The best way to invest in precious metals is to buy the metal directly and maintain its physical form or to buy ETFs that have significant exposure to precious metals or companies that are engaged in the precious metals business. In the case of a margin adjustment, you may be asked to invest additional money to prevent your investment from liquidating without your consent or prior notice. In general, metals such as gold or silver maintain wealth effectively over the long term, although they can become very volatile. Investing in precious metals has some advantages over investing in stocks, such as being a hedge against inflation, having an intrinsic value, having no credit risk, a high level of liquidity, providing diversity to a portfolio and facilitating purchases.
Investing in precious metals is a way to diversify a portfolio that is mainly made up of stocks and bonds. . However, investing in physical metal can be very attractive to some investors looking to diversify their investment portfolios. Author, professor, investment expert with almost two decades of experience as an investment portfolio manager and financial director of a real estate holding company.