Precious Metals What are precious metals The most

Precious Metals What are precious metals? The most popular precious metals include gold, platinum, and silver. Investments in precious metals can take many forms: bullion (actual gold bars and/or wafers), coins, certificates (that represent ownership), mutual funds, and stocks in mining companies. Futures are another investment option in which the investor contracts to buy or sell precious metals for a certain price at a future point in time. Each of these options has its own level of risk. Being knowledgeable about investing in precious metals is important. It is a very popular form of investment for those investors who are looking to diversify their portfolios and minimize their risks. Rewards: There are many benefits associated with precious metal investments: § Bullion and coins allow you to have physical possession of your investment. § It is a relatively safe investment. § It is liquid. § It is recognized globally and historically as having true value. § Precious metal prices rise during times of economic or political turmoil. § Precious metals are exempt from all capital gains taxes, which can result in big savings. Risks: Investing in precious metals carries unique risks: § When the economy is healthy the price of precious metal stocks tend to fall while the value of other stocks rise. § Bullion or coins don’t pay dividends or earn interest. §In order to make money with your precious metal investments you need to sell at just the right time, when their price per ounce is more than what you paid. §Commission ranges from 1% to 8% when you purchase bullion or coins, and the design and condition of a coin can greatly affect its value. § Beware, there are many scams out there designed to attract the uneducated investor. Who invests in precious metals? Generally people who want to diversify their portfolios invest in precious metals. Many people are encouraged to place between 5% and 10% of their investments into precious metals. It is normally considered a medium- to long-term investment. Each form of precious metal investment attracts a different type of investor. For example, stock in precious metals seems to attract the aggressive risk taker, whereas precious metal funds are diversified and attract a more conservative investor.