There is a reason why gold has been coveted since the beginning of time. It’s not just because it is beautiful, but also because it retains its value in times of economic downturns and uncertain markets. Gold has a long history with humans, dating back to when our ancestors first started trading goods for currency. In 1835, the United States made gold legal tender to stabilize their economy after President Andrew Jackson declared that all land would be paid for in gold or silver coins. Today, many people turn to precious metals as an investment vehicle due to their stability and tangible worth.
If you are looking for a way to protect your assets from unpredictable market fluctuations or inflationary pressures, investing in precious metals may be one of the best ways to do so.
Inherent value around the globe
Precious metals are tangible assets that carry inherent value in most countries around the globe. This means that in the event of an economic meltdown, hyperinflation, or any other crisis there is a chance you can trade your precious metal assets for food and other necessities. Because of that, more and more people are transferring their individual retirement accounts (IRA) towards the best gold IRA companies. With market fluctuations being more frequent than ever, it seems like a wise decision to secure a retirement plan in some solid value.
Time-tested
Precious metals have been used as currencies and traded as commodities for over 3,000 years. Gold and silver were once the only types of currency and they were even used as a means for exchange in the New World. Precious metals have stood the test of time and endured economic catastrophes while providing investors with a valuable store of value.
Precious metals have a history of protecting investors during times of economic and political turmoil. Its unique ability to provide safety for your capital has made them the leading asset class in which to hold long-term wealth.
Easily accessible
With gold’s market cap being over $7.5 trillion and silver’s being over $39 billion, the precious metal markets are some of the most liquid in the world. This means that if you should choose to trade your physical bullion it can be done quickly and efficiently with low transaction costs. As an investor, you will never have to worry about not being able to access your assets as the markets are always open and ready for business.
Some precious metal mining stocks offer shareholders the opportunity to receive dividends based on their share of company profits. In addition to dividends, mining companies can increase or decrease their stock price which means you likely have an opportunity to make money from changes in the market without having to sell your physical assets.
Income-producing investment
In many cases, people buy precious metals for investment purposes only and elect to store the physical assets until they are sold at a later date. While some investors choose to hold onto their precious metals for decades, others buy and sell their assets regularly which is an excellent way to passively receive income on your investment capital.
Purchasing precious metals allows you to hold something tangible that you can pass down to future generations as a legacy instead of just relying on stocks and bonds that could be rendered worthless if there’s another major collapse in the market.
Precious metals favor an inflationary environment
Over the years, precious metals have demonstrated that they are capable of maintaining their value even in an inflationary economy. This is one of the major reasons that investors choose to store physical assets within their portfolios because there’s no need for them to worry about how long it will take for their investment to rebound. Precious metals have a track record of maintaining their value during economic downturns, whereas paper investments tend to suffer as a result of market fluctuations.
Precious metals allow you to diversify your portfolio
By adding physical precious metals to your asset mix, you’ll be able to balance out your investment strategy with a tangible investment that’s not correlated with the movement of other investments. Paper-based assets like stocks and bonds tend to rise or fall at the same time; however, precious metals can provide investors with a way to stabilize their portfolios.
In addition to acting as an inflation hedge, precious metals also function well as a hedge against market volatility that’s often seen during political and financial upheavals. Most recently, we can look at the roller coaster ride that the stock market took as a result of the 2016 presidential election and how gold prices were solid despite the uncertainty.
It’s easy to spot the benefits of investing in physical assets that are designed to retain their value during times of economic crisis. Precious metals offer investors the opportunity to hold onto something material that they can pass down to future generations as well as diversify their portfolios. Finally, investing in physical assets provides individuals with the chance to hedge against market volatility that may be caused by political or financial upheavals.
