Individuals who are new to the investment game might well wonder if buying precious metals is like purchasing stocks: owning only a piece of paper which could become worthless in the event of a crash. This is the beauty of investing in silver, gold, and other metals. You can own the actual, tangible items, not just a certificate to say so. Buying the real thing is just one way to invest in these commodities, however, and other methods have their own advantages and disadvantages.
Mining and Machinery
An investment is a commitment, often a financial one. This suggests that there is risk; that the person making this commitment is willing to stick by his choice in good times and bad and knows the risks of what he is doing. This goes for people who put their money into supporting companies which mine for precious metals.
When a person supports the mining industry in exchange for financial gain, he must realize that he is buying that piece of paper again; the certificate which says he will profit if the company profits, but his money will be gone if the firm makes a bad decision. There is also the chance of breaking even.
A bad decision would be speculating on a new mining site which turns out to be dry, or continuing with a site which has given everything it has or costs more to bleed dry than is worthwhile. Consumers are always advised to look carefully at speculative plans from firms and do some geological studies of their own to determine how viable these plans are.
Investors can buy shares in mining companies, or they can support the making of machinery used in mining. Many pieces of equipment, ironically, require some rare metals in their construction. They cost hundreds of thousands of dollars to build and to purchase, which can be good news for investors. But they sometimes sit around unused or a maker goes bust because of competition or lack of demand. These areas of investment are tied directly to the profitability of mining areas and what they hope to bring to the surface.
Real Gold and Silver
Consumers can also buy real bars and coins of gold and silver. They can purchase earrings, pendants, and tankards. Their collection could include silverware, jugs, frames, and antiques made of solid silver or 24-carat gold. Even scrap metals are being turned in at shops which will give cash for broken chains and lockets according to their weight.
Where Do You Put the Goods?
Gold has the potential to be like anything you buy on the internet. Consumers have their bars shipped to their home addresses for storage until they think the time is right to sell them. Silver might turn up in bags of coins.
Most individuals would say this is risky business. They would rather return to the certification idea, at least knowing that their goods are real. When they want to see, touch, or cash-in their metals, they can do so because their physical value is undeniable, unlike the value of numbers on a certificate. This is the safest way to look after an investment of this kind. It does not put a family at risk of theft or turn the onus of security onto regular people. Professionals with secure premises know how to keep customers’ precious metals safe.
When Can You Resell?
Once you buy gold, silver, palladium, titanium, and any other metals of worth, you can also resell them at any time. This goes for stocks in mining companies and machinery too. Although financial experts will make educated guesses as to when a commodity will peak and how long it will be before an investment starts to really make you any money, you are the owner of the goods. What you say goes. The only exception would be if you have your investments tied into an IRA or 401k. The latter in particular is reliant on the choices made by a financial organization. The only thing a consumer can do if he is unhappy is to roll his 401k investments into a gold or silver IRA and have his way, but there are regulations to consider with retirement plans.
When to Sell
Opinions about how long one should hold on to rare metals suggest that there are two types of investments: long term and short term. If you can part with your investment for several years, even decades, you are likely to be rewarded by certain items. Other metals are better for relatively quick turn-around, though not weeks and months. Give them some time to perform. Regularly check the current gold spot price to stay informed.