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Why Invest in Precious Metals?

Why Invest in Precious Metals?

August 06, 2010240 view(s)

One of the primary lessons in investment is diversification and precious metals are an ideal way to diversify your investment portfolio.

Best of all, there’s no better time to invest in precious metals than the present. Now is a perfect time to look into adding some diversity to your portfolio through gold and other precious metals.

Why diversify your investments to include precious metals?

There are two types of investment relationships: correlated and non-correlated. If a group of assets responds to economic forces in similar ways, they are referred to as “correlated.” If they respond differently, they are “non-correlated.”

Now, correlated investments are great if you know that the value of your assets is going to rise. As we’ve seen, however, this is very hard to predict. The last thing you want is to approach retirement with your investments having lost much of their value.

This is where diversification comes in. The most common form of investment is in stocks. Fortunately, precious metals are a non-correlated asset to stocks. When stocks are rising, precious metals are generally falling. Conversely, when stocks fall, precious metals generally rise. By investing in multiple classes of assets, you can ensure that when it comes time to draw from your investments, you aren’t left with lost value.

Why invest in precious metals now?

If you’re looking to add diversity to your investment portfolio by investing in precious metals, there is no better time than right now. All signs point toward the US being at the beginning of a new “Interest Rate” cycle. The last two cycles have alternated with the first, from the 1960s to be the 1980s being one where stocks struggled and gold rose and the second cycle is one where gold struggled and stocks rose. We are now seeing a cycle where, again, stocks are struggling and gold is rising.

Additionally, many rare coins are currently near their historical or recent lows. For example, the $10 Liberty Head and Indian Head coins are excellent and scarce coins that are due for an upcoming increase in value. The classic adage of “buy low, sell high” holds true for precious metals, too.

With prices like these, there is no better time to invest in precious metals. Contact us today for our prices and current inventory.

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