Since last year, conversation surrounding investments in the stock market has mainly been skeptical, even as economies across the globe slowly recover and open back up. This may explain why most investors are moving towards precious metals, such as silver and gold, which have a low correlation with the stock market and usually hold their value even in times of market volatility.
If you aren’t sure whether you should include precious metals in your portfolio or how you can do so, below are a few things that you should know.
What are precious metals?
Precious metals are rare metals with a high economic value based on factors such as their function as a store of value, high demand in industrial applications and scarcity. The most common precious metals that are suitable for investment purposes include palladium, platinum, silver and gold.
How can one invest in precious metals?
- Invest in an ETF (Exchange-Traded Fund)
Investing in precious metals through Exchange-Traded Fund affords you liquidity, which allows you to easily sell and buy shares via your brokerage account. The process is also less expensive as well as convenient, in comparison to purchasing the physical metal. It should be noted that this option doesn’t allow you to lay claim to the physical metal or own it.
- Purchase shares of mining stocks
While you will not be taking ownership in the physical asset, this is an easier way to invest in precious metals because all you have to do is purchase shares of companies that mine precious metals.
- Purchase the physical metal
For this option, you will have to purchase the metal, such as gold bars, silver coins or gold itself, which affords you a physical asset that you can own. It also eliminates the counterparty investing risk. To do this, you need a good understanding of the metal’s spot price at the time of purchase, as paying a high premium for the metal may make it harder for you to get your primary investment back.
This does not mean that there are no limitations to investing in precious metals. There are, including the transaction costs incurred and the fact that precious metals are commodities, which means that they don’t produce interest or cash flow but they do hold their value in the long-term against inflation.
All in all, you should ensure that your investment decisions are deliberate and carefully thought through so that you can see benefits from the investment in the long term. And given that there is a wide variety of precious metals sector players such as Asia Broadband Inc. (OTC: AABB) to choose from, investment opportunities aren’t hard to come by.
NOTE TO INVESTORS: The latest news and updates relating to Asia Broadband Inc. (OTC: AABB) are available in the company’s newsroom at https://ibn.fm/AABB
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