Smart Investor

If you are interested in building an investment strategy that you can depend on now and in the long-term future, then it’s a good idea to take a look at the precious metals market. You can learn so much with just a little research, and the more you understand, the more you will see how you have a much better option than you could find in the stock market, paper money, or anything else that depends on the state of the economy. In precious metals, you can choose between gold, silver, platinum, and palladium and you can purchase the physical metal, which works on a different level outside of the stock market.

Why Should You Choose Metals?
Of course, before you can choose to learn the precious metals market and build your investment strategy in this way, you need to understand a little more about why it is such a viable option. Silver and gold both have been available as a form of wealth for thousands of years, dating all the way back to ancient times. While platinum and palladium are newer, they still are viable forms of wealth.

In recent history, all of the market watchers for investing in precious metals have been watching the prices for gold, silver, platinum and palladium with growing interest. The prices have been skyrocketing with seemingly no end in sight. More and more people jumped on the bandwagon, but it seems as if the gravy train may be over, at least for a little while. This has many wondering if palladium investing in 2013 is even a good idea. Here are some things to consider.

Drop in Foreign Demand for Palladium

One of the things to remember is that palladium has always been in high demand in the European nations. Some of the nations the watchers are watching are South Africa and Russia, as well as Europe. This is because these are the top two producers of palladium in the world. They have been squeezing supply for some time. Those thinking about the possibility of palladium investing in 2013 have been tormented by the supply of palladium dropping. While this is normally a good thing, consider for a second the fact that the prices for the metal have been dropping as well.

While there are many different precious metals to invest in, when one is ready to begin investing in the precious metals market, gold is the best place to start. Gold retains its value all over the globe. Gold has been valued and used as a basis of trade for all of human civilization. Investing in gold, like any investment, is not without risk, but professional investors hedge against even riskier investments by purchasing gold.

The First Step

The best place to start when building a gold portfolio is to purchase physical gold. While this is just one way to begin investing in the precious metals market, it provides the best education. Physical gold can be purchased in coins, bullion, bars, or even jewelry. The gold you buy is paid for in cash equal to the current value of the gold. Once purchased the gold immediately protects the investor from currency fluctuations and inflation.

Precious metals buying remains very popular, even though metals have lost some of their value over recent months. The loss in value is widely regarded as a simple price correction among investors, given that the prices for precious metals had soared to levels that were historic highs. In order to understand why precious metals buying is still popular, it’s useful to understand some of the differences between the various metals available and why they still do have a great deal of value, even if they are trading for a smaller quantity of money per ounce at present.

Slower Trends
Whether it’s because of the speed with which information is delivered these days or the thrill of rapid price increases and decreases, people tend to focus on the very short-term performance of precious metals. Precious metals buying, however, is oftentimes a long-term investment and, over the long haul, there are some trends in place that could greatly affect the prices of precious metals.

There is perhaps no more trusted and dependable conveyance of wealth accoutrements than that among precious metals.  Be it gold, silver, platinum or palladium, investing in precious metals as opposed to paper instruments such as bonds and bills brings with it a peace of mind that cannot be found among the schemes of a fiat economy.

Even so, there can be found an exuberant – many would dare say dizzying – dynamic at work among something deemed as stable as precious metals.  Consider the recent roller-coaster taken by the gold market: within less than a year the cost of gold per ounce has dropped $600 to a July price of $1,200.  Analysts put the blame for the short-term instability on a combination of mass importing of gold into China and India, commercial uncertainty about mining operations, and gold itself as a sentimental display of material wealth.

Platinum and palladium are also in flux at this time.  Valued as much for their place in manufacturing as for their use in fine jewelry and medical instruments, platinum and palladium have become something of a headache for those short-term investing in precious metals.  What was projected to be an upward spike in platinum and palladium prices has instead become a sinkhole.  The erosion beneath can be traced to a less-than-anticipated need for palladium from European industry and continuing labor disputes at the mines in South Africa where most of the world’s platinum and palladium is excavated.

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