Precious metals provide investors with a lot of opportunities to make money. Before you can take advantage of those opportunities, though, you need to ask yourself three questions.
First, you need to decide if you want a long-term or a short-term investment. Then, you need to determine how much risk you want to take with your investment. Finally, you need to determine how quickly you want to be able to liquidate your investment.
Long-term vs. Short-term Investing in Precious Metals
Some investors like to go in, make their money and leave the market as quickly as possible, while others like to let the investment mature. You will get the best results if you hold your investments for at least three years. However, if you simply cannot wait for three years, you can invest in an ETF or mining stock. These are more volatile than other forms of investments are, but they can provide a faster return. Just remember that you can also lose money with these types of investments, so make sure you understand the marketplace before you enter into a short-term investment.
Assessing Your Risk
You also have to determine how much risk you want to take when investing in precious metals. There are a couple of ways to assess your risk. First, physical precious metals have less risk than ETFs and stocks do. That’s because there are a lot of underlying factors that cause prices to fluctuate in ETFs and stocks. Thus, if you don’t want much risk, you will need to go with a physical precious metal. You can store the precious metals yourself or use a depository.
Next, you can assess your risk based on the type of precious metal that you choose. Platinum and palladium are more volatile than gold and silver are. Thus, if you want to limit your risk, you need to consider silver or gold when investing in precious metals.
Ability to Liquidate Quickly
You also need to decide how quickly you want to be able to liquidate your investment. Bullion is a great option if you want something that you can turn into cash quickly. Just make sure you store the bullion yourself if you want to be able to liquidate it quickly. If you store it with a depository, you will have to wait for the bullion to be released.
Stocks and ETFs are also solid options, since you can cash them in when you want. Then, you can get the money deposited into your account.
Putting it all Together
You might like some features provided by one investment option, and some features provided by another. If that is the case, you might have to compromise to a degree. Simply determine what is most important to you and what features you can do without. Then, you will be able to find an investment opportunity that meets your needs.
Once you come up with your plan, you can start investing in precious metals. Then, you can experience how the different investments work, and adjust your strategy based on your returns.
