Even if you have invested in the stock market or other assets in the past, there are some considerations to keep in mind prior to investing in precious metals. Before you make your first purchase, keep these suggestions handy to make the most out of your precious metals collection.
Making Short-Term Investments
Ask yourself why it is that you’re investing in precious metals in the first place. If you believe that precious metals will allow you to make quick cash off small investments, you’re sorely mistaken. While the price of an ounce of gold might have increased dramatically from 2001 to 2011 (from $375/ounce to $1,900/ounce), this was not realistic of the typical precious metals market. Unaware investors started treating stocks as if they were low risk, but they couldn’t have been further from the truth.
If it is your goal to make large payoffs from small investments into either gold or silver, you should reevaluate your decision. Gold and silver investments should be treated as long-term investments, understanding that it is an investment that works best for your financial portfolio in the future.
Overlooking the IRA Potential
One of the great benefits of gold and silver is its potential for growth within a self-directed IRA. While you might think that just owning your gold and silver investments will pay off, it proves beneficial to set up a precious metals IRA portfolio that can both protect and secure your retirement funds. This can provide an easier option for you to store your precious metals (most trustees will store them in secure depositories) and will cover your investments with just a flat annual fee. Just as you should be thinking for the future while investing in precious metals, you should equally consider the benefits an IRA can provide to you.
Investing Too Much
One of the primary mistakes many first-time precious metals investors make is investing a large portion of their savings accounts at once, expecting either (a) notable payoffs over time or (b) ensured security, wherein the value of the investment will not decrease over time. This is faulty thinking! While investing in precious metals can work out to your benefit, you should never be investing all of your assets into one item—i.e., don’t put all your eggs in one basket. Instead, consider making small investments in gold and silver to start and then watch the market and how the value of your investments change with time before you begin investing more.
Investing in Scrap Gold and Silver
Just because an item might be made “of” or “from” silver or gold doesn’t mean it possesses an inherent worth. While you might get some value out of junk silver or familial gold jewelry, these items should never be viewed as investments. Save your investments for minted, .999 fine precious metal items, such as coins and bullion bars and rounds.
Investing in Precious Metals From Unverified Sellers
Say you’re looking into investing in precious metals and are in search of a cheap dealer. At some point, you find a dealer whose prices are quite low and decide that they’re the ones whom you will buy from. Maybe you buy rare, collectible coins from them or purchase a decent weight of bullion. The issue you run into with buying cheap, particularly from sellers who are not notably verified, is that you might end up purchasing false precious metals—gold and silver that is impure. To avoid this pitfall, you should take your time to research sellers before buying from them. At Provident Metals, we ensure that all of our products are certified and verified gold and silver pieces, getting you the most out of your investment.
Investing With Little Research
Don’t feel as if you need to pounce on an investment. It’s better for you to take your time before tossing your money into the market. Read up on some investment books, consider reading the blogs of reputable precious metals sites and keep a close eye on the market, watching how it fluctuates with time to get an idea of what to expect when you do invest.
Your best bet is to take your time when investing. No matter what anyone else says, don’t rush into it! Heed our advice and make sure you don’t make these mistakes like others before you.