Precious Metals

Purchasing precious metals such as gold, silver and platinum is a great way to diversify your investment portfolio. When talking about precious metals many use this investment opportunity to have a secure financial system when and if there is a financial crisis, hyperinflation and more so when planning ahead for retirement.

If you are a new investor then we wouldn't recommend to jump in purchasing precious metals straight away, as it’s not a quick win or make you-rich-investment.  It’s more for safety when all your investments elsewhere have plummeted due to economical issues and long term gain. Metals such as gold that are more scarce than others are more likely to rise in the future, so its definitely worth considering when purchasing metals. Make sure you are investing money that you will not need anytime soon, as far as 10-20 years from when you have made the purchase of physical metals that you hold in your possession.

As with everything in life nowadays, metal investments are also evolving rapidly, there are several ways you could invest in metals: 

1. Holding Physical metals in your possession - This is the most common investment people make when investing. You purchase gold, silver or platinum from Bullion dealers and exchanges in the form of Bullion bars or coins. Once purchased you have full ownership and its your responsibility to keep safe. There are obvious pro's and con's in this method. The pro’s being you have full ownership of your metals and you are always available to you whenever you require. The con’s of this method, however is you could loose your metals, from theft being the most common way. So storing your metals is the most important factor to consider when investing. The safest way will be store your metals in a Bank vault or metal vault storage facilities available worldwide, such as Brinks and Loomis. Where ever you choose make sure they are reputable and offer full insurances. However, keep in mind the cost involved in storing your metals as this can become quite expensive.

2. In relation to the first investment method there is another possible end to the process. You can purchase the metals as you would from a bullion dealer or exchange, but instead of physically holding the metals you could ask the dealers to keep hold of the metal on your behalf for a small fee. Nowadays they have storage facilities where they hold metals for their customers and provide full insurances if they were to ever lose your metals. This also makes the metal you are purchasing a lot cheaper and in line with the market price of the metal at the time. You can sell back to the dealer at any time or you can ask for the metals to be shipped to you at anytime too. Some great such dealers include BullionByPost and RoyalMint.

3.  Another way of investing in precious metals is in fact not the usual traditional method of physical metal. You can invest via (ETCs) Exchange Traded Commodities or FTSE gold mining shares. Both of which can be purchased using the usual stocks and share exchanges. ETCs aim to keep tracking the price of the commodity or the physical metal itself. 

Gold Mining shares not only tracks the value of gold but also the miners themselves. A lot depends on the gold price itself as to how well your investment does as if the gold price is high then the miners will have more cash to return to shareholders and if the gold price is low then this directly effects the miners. This method is a great way of receiving regular returns on investment in the form of dividends. Plus if the gold price goes up you will of course see the benefit in the long run on your investment. Another great advantage is you can invest using your stocks and shares ISA, in which you will not have to pay any tax on returns.