Everything You Wanted To Know About The Best Precious Metal To Invest In 2022
It won't be wrong to say that recent pandemic has changed the world. Some economies have gone into recession and stock markets have weakened. All these economic fluctuations have brought back the painful memories of 2008 financial crisis for many investors. These fluctuations have reminded investors how quickly a stock can lose value and the inherent strength of precious metals.
Many investors lost more than half the value of their stock portfolio in the financial crisis of 2008. The economy is in crisis again. The enduring nature of this pandemic has made things worse and many investors are now of the opinion that the current financial crisis is going to be worse as compared to the last one.
The economy isn't out of the dumps despite the Build Back Better Plan by the Biden Administration and distribution of vaccines. Albeit, things are moving in a positive direction but economy is still going to take some time to come back to its original level and grow. Enough people need to be vaccinated in order to bring the pandemic to an end and that's going to take some time. Also, enough people need to get back to work in order for the economy to completely recover and business to return to normal and that is also going to take some time.
These are the times when moving back to precious metals market might be a smart move. It could offer you a way to protect your gains made before the 2016 bullish stock market. When the economy started recovering after the 2008 financial crisis, the precious metals market vaulted new heights, particularly gold and silver.
The 2021 precious metals market looks even more promising as compared to the market after 2008. The current market offers many more options for investors.
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Advantages Offered by Precious Metals
One of the things that makes precious metals valuable is their rarity. Precious metals are widely used in jewelry but there also have many industrial uses. Precious metals are coveted by both industrialists and investors. Some of the best known precious metals include platinum, gold, and silver but there are many other metals in this category including iridium, rhodium, palladium, osmium, and ruthenium.
Top 5 Precious Metals
Our top 4 recommendations for investment in precious metals include gold, silver, platinum, and palladium. Rhodium is also a popular investment choice but it might not be good for reasons we will discuss later.
Here is a quick look at why these precious metals are worth investing in and how you should use them for diversifying your portfolio.
Gold has represented wealth for centuries. You must have heard of thousands of stories surrounding gold. It represents abundance.
It is also a practical choice as an investment as gold has always preserved its value. There is no denying that gold is legendary. Evenly the greatest athletes at the Olympic Games are honored with gold medals.
There is a fascinating history behind gold.
The idea of gold as a currency was introduced in Lydia, which is now part of Turkey, in around 600 BC. When paper currency was first introduced across the globe, the value of paper currency was backed by gold. The phenomenon of tying the value of paper currency to gold was known as the Gold Standard which is a term that was part of the Gold Standard Act which was introduced in 1900.
The Gold Standard was abandoned by President Nixon in 1971 and since that time, there has been an exponential increase in the gap between the value of this precious metal and banknotes. For instance, the value of a $5 US liberty is $625 today whereas a $20 US Liberty gold coin is worth $2132.95.
Investment in gold isn't just to find a source that is stable in value against the value of a currency. It offers a lot more than just a means of portfolio diversification. Investors have realized gains that are higher than the returns given by the S&P 500 and Dow Jones Industrial Average, since 1971.
In fact, the growth in value of gold has been double the average annualized gains returned by the stock market and since the 2008 financial crisis, it has tripled in value. Gold is widely considered an antidote to the poor stock market returns by savvy investors. These investors consider it a solid solution to the ongoing economic crisis that is slipping into a recession.
It is seen by these investors as a way to safeguard their wealth. If you choose to invest in a gold IRA, you will get the same tax shelter benefits as you currently get with 403(b), 401(k) or IRA, and similar retirement accounts. Gold bars and coins bought for a gold IRA account also get additional protection.
In short, it is right to say that gold offers an excellent way to not just protect but also appreciate your wealth.
In terms of investment interest, silver doesn't come close to gold but you shouldn't underestimate this precious metal. In fact, the price of silver can rise faster as compared to the value of gold. In fact, it happened in the 2008 financial crisis. Gold did great as its price almost tripled but the price of silver quadrupled.
The price of silver moves differently from gold as this metal has different properties and it serves a wholly different purpose. Silver is also valued for its aesthetic appeal just like gold but silver also has a lot of uses in industrial processes.
It is widely used in a range of industries. For instance, a lot of silver is used in dental equipment and it is also widely used for making a variety of electronic parts. Currently, manufacturers of solar panels are also using silver.
One of the main reasons investors have shown interest in silver is that the demand for this metal exceeds the supply. More often than not, the demand is extremely high and there isn't enough supply of silver to cater to the demand.
Silver rarely exists by itself in nature and it is usually mined as a byproduct of other metals such as copper or gold and this is one of the reasons, it's supply fluctuates. Due to rarity of silver mines, the supply of silver goes down as and when a gold or copper mine closes.
Some analysts are of the opinion that the current gap between supply and demand of silver is likely to result in a price break out. Silver is an excellent investment today as it is highly undervalued.
Investors have the option of investing in silver through silver IRA where they also get the tax benefits of a retirement account.
Platinum is right behind gold and silver when it comes to the most popular precious metals.
While gold has been a popular choice ever since the dawn of civilization, it won't be wrong to say that platinum is a newcomer. In fact, it was only in the 18th century that metallurgists found a way to separate platinum from other metals. This is the reason, the popularity of platinum has been realized only in the Age of the Enlightenment.
This metal was quickly adopted by many industries once they discovered its unique properties such as corrosion resistance and durability. Jewelers also started using it widely.
While platinum is available for sale in the form of coins and bars, its availability is not as high as gold and silver bullion. It is also widely used in the automotive industry, electronic industry, and watch making industry.
The automotive industry remained the primary buyer of this precious metal for many years as it has the best properties to be used in catalytic converters. However, its price has gone down in the recent years. This is due to the reason that palladium has become the first choice of automotive industry for making catalytic converters. Palladium costs less and is properties are similar to platinum when it comes to corrosion resistance and durability.
Currently, more than 80% of all the platinum in the world is produced by South Africa. This price is at an all-time low currently which makes it an excellent choice for storing value. It is likely that the platinum will rise again in case there is a disruption in its supply and that will lead to soaring prices.
Learn Why Now Is A Better Time Than Ever To Invest In Gold!
This metal was discovered only in the 19th century. It has many properties similar to platinum. For instance, it is also highly durable and resistant to corrosion. Similar to platinum, automotive industry is also the primary user of this metal as they use it for making catalytic converters.
Only a few countries produce Palladium. South Africa and Russia remain the major producers of thsi metal whereas some amount is also produced in the United States and Canada.
Palladium can quickly go up in price. The supply from Russia fell in the early 2000 and that caused the price to go up to $1300 an ounce.
Thankfully, the price came back to just a few hundred dollars per ounce by 2008. Automakers prefer it as it has properties similar to platinum but it is much cheaper.
The demand for Palladium was a robust due to its use in making catalytic converters. However, supply disruptions happened in early 2020 and that led to an exponential increase in the price of this metal when it touched an all-time high of $2500 an ounce. However, the price has come down to less than $2000, since then. Palladium is so expensive that it's price is even higher than gold.
Even though the price of palladium has not come down, automakers are in no hurry to switch to platinum again as redesigning catalytic converters using platinum is expensive. Even though supply disruptions from Russia and South Africa have led to an increase in the price of palladium but automakers are not abandoning it they expect that its average price will go down over time.
The only reason it is perceived as a precious metal is because it's extremely rare. It does not have any aesthetic properties similar to gold or silver but it does have a variety of industrial uses similar to platinum and palladium.
Rhodium is also used for making catalytic converters and South Africa produces around 80% of it.
However, it is not considered a good choice for an IRA as its price is extremely volatile unlike the prices of palladium, platinum, gold, and silver. This high volatility in prices makes it useless for long-term investments. The volatility in its price is so high that in 2016, its price was $625 an ounce but it's price rose to $14,000 an ounce in March before it came back down to just $8000 an ounce.
Also, it isn't sold in the form of bars or coins unlike platinum, gold, and silver which means storing this metal is a challenge. It is preferred for investment only by a small group of investors who are not averse to taking high risks. They are speculators and invest in this metal in the hope of making profits which, naturally, also makes it a risky investment.
Which Precious Matter Should You Choose For Investment?
If you plan to invest in precious metals to save money for your retirement, you should choose gold as it's the best metal for long-term investment. It offers the best risk to reward ratio when you compare it with other precious metals. Also, the price of gold has remained stable over the long-term.
If you are willing to take on some risk , you might want to invest in silver. This precious metal is undervalued at present which means it could have a potential upside. To diversify your portfolio, you might want to add some palladium or platinum to your portfolio.
As far as rhodium is concerned, it's best to stay away from this precious metal unless you are comfortable with playing a high-risk, high reward game.
When it comes to choosing precious metal companies for making your precious metal investments, there are thousands of companies out there. Here is a list of 3 companies we have found to be the best:
All 3 of these companies have been given hundreds of positive reviews by customers in the past year alone. Our number one choice, Goldco, has received thousands of five-star reviews from their customers.
It has an excellent reputation and there is no doubt that you cannot go wrong by requesting a completely free gold investing guide by this company. Click here to visit their website.
How To Start Investing In Precious Metals?
There are hundreds of companies out there to help investors invest money in precious metals. We have extensively researched and reviewed many of these companies.
In our research, we checked their overall reputation as derived from customer reviews, management, company history, fees, customer service, and various other factors.
This research has helped us narrow down the list to these top 3 companies. All these companies have been given hundreds of five-star reviews by their customers and our number one choice is GoldCo which has more than 1000 five-star reviews.
They also offer a completely free precious metal investment guide and you can get this right for free by clicking this link here.