Understanding whether investing in metals regarded as precious is a good idea
Of the many reasons why people invest in gold, silver, diamonds and other precious stones, the one that is most common has something to do with precious metals being tangible commodities that regardless of whatever happens to continue to retain their intrinsic value. It is a means to keep your portfolio balanced, in the vent that the worth of the Dollar decreases, gold will maintain its monetary value, despite the currencies being affected by deflation.
A large section of the society has already hoarded their cupboards with precious stones of all kinds, be it a diamond ring, sapphire or ruby studded earrings, gold bangle designs in 20 grams or more, silver necklaces, gold biscuits, and the likes. The more superstitious and pessimistic section of the society believes investing in gold is the way to go for when the economy collapses, and we are back to trading in commodities. The more reasonable argument, however, states that people are more likely to resort to bartering in the unlikely event of collapse. As is highlighted in an Atlantic report, “In other words, when an economy goes full-on Mad Max and we’re all red beating switched to bartering, the survivors are going to be more interested in useful goods than in a soft metal useful mostly for ornamental purposes.”
However, when it comes to investing in gold, the smart approach would be to invest just as much that a balance is maintained. This is true for any kind of investment. Overinvesting is highly not recommended and should be avoided at all costs. With metals being volatile, the risk is not less and so is the return not too high. The stock price of precious metals has taken a beating with gold plummeting not too long ago in 2017 where it was being told that gold had lost its lustre.
One other factor to consider is the lack of dividend that doesn’t result in a lot of returns even in a period of time. Despite the fact that they hold their value across time, income, dividend or earnings through investing in precious metals is too low. The idea of investing is metal of preciousness and value is still to protect against inflation.
Another for investors is to invest in other precious metals as well, the likes of platinum and palladium, instead of gold and silver only. Gold jewellery designs with price and weight, the kind you desire, or silver ornaments may seem like the ideal or more attractive choice, but it is not necessarily the ideal investment strategy to follow.
So, that concludes to being mindful of what you are investing in, how much you plan to invest and for how long you are willing to go with the investment.