Should you diversify in precious metals?

Diversifying the precious metals sector is an even smarter way to maintain stable investments considering the various trends in the market for different precious metals. Learn about the three main options you have for making a smart investment in diversified precious metals. While there are several ways to diversify your portfolio, many experts recommend that a certain portion of your assets be earmarked for precious metals. There are many ways to buy precious metals such as gold, silver and platinum, and a number of good reasons why you should give in to the treasure hunt.

As marketing director of Regal Assets, the market leader in physical precious metals, I have seen first-hand how gold and silver holds have helped create and protect the wealth of countless investors. Although they may come with a certain degree of security, there is always some risk when investing in precious metals. Whether you invest in bullion, coins or exchange-traded funds (ETFs) backed by precious metals, exposure to gold and silver protects your wealth when the value of the dollar declines. Investing in precious metals has some advantages over investing in stocks, such as being a hedge against inflation, having intrinsic value, no credit risk, a high level of liquidity, providing diversity to a portfolio and facilitating purchases.

From the point of view of investment theory, precious metals also provide a low or negative correlation with other asset classes, such as stocks and bonds. As rising inflation has increased the operating expenses of gold mining companies, gold royalty companies have become an inflation-resistant alternative for investors seeking exposure to the precious metal. Including the four major precious metals in your asset portfolio allows you to take advantage of the diversity of a popular asset class that can rise when a currency or stock falls. Regardless of their level of sophistication, I have found that the best path to true diversification is to invest in a variety of assets, including alternative assets other than traditional stocks or bonds.

Talk to your financial advisor about how to invest in popular gold or low-risk precious metal ETFs before you start investing in gold and precious metals. But which precious metal is best for investment purposes? And more importantly, why are they so volatile? Gold mining is a global business, with hundreds of mining companies searching for the precious metal in dozens of countries. In addition to the reasons mentioned above, diversifying a portfolio with precious metals has additional advantages. So, if you're just starting out with precious metals, read on to learn more about how they work and how you can invest in them.

Christine Raiford
Christine Raiford

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