Are you curious as to why numerous investors gravitate toward precious metal investments? These assets offer an alternative to bolster your financial security and feature options like gold coins and bullion.
Learn the benefits of investing in precious metals and how you can leverage the expertise of AU Precious Metals to help you devise a strategy to diversify your portfolio and protect your financial future.
1. Choose From Several Precious Metals
Precious metal investments come in various types, each with its own value. Gold and silver are the most traditional and well-known, but modern investors also have options like platinum, palladium, and rhodium.
- Gold assets. Investing in gold can take various forms, such as gold bars, government-issued coins, and jewelry. This metal is renowned for its high value and stable market presence, making it an excellent choice for long-term investment.
Gold’s universal value, recognized throughout history and across cultures, has established it as one of the world’s oldest and most reliable investment assets. Its global acceptance adds to its appeal, positioning it as a safe and versatile investment option.
- Silver assets. Silver investments include bars, government-issued coins, and jewelry. It’s more affordable than gold, making it accessible for investors with smaller budgets. For example, on November 20, 2023, silver’s spot price was $23.40, lower than gold’s price of $1,977.19. This affordability is one of the key benefits of investing in silver.
Silver’s widespread industrial applications mean its price is influenced by supply and demand, leading to greater price volatility than gold.
However, for investors skilled at market timing or with a higher risk tolerance, these fluctuations can offer more frequent opportunities for profit compared to the relatively stable market for gold. When the silver-to-gold ratio decreases, there may be opportunities for higher returns from silver investments.
- Platinum assets. Platinum is available for investment in forms like bullion bars, government-issued coins, and jewelry, similar to gold and silver. It is widely used in multiple industries, including electronics, automotive parts, and thermocouples.
This industrial demand means that platinum’s value can fluctuate based on supply and demand, leading to volatility and increased risk. This positions platinum as a high-risk, high-reward asset, appealing to investors looking for significant growth potential.
- Palladium assets. Palladium is primarily available in bullion bars. While some governments have produced palladium coins, such as the Palladium Canadian Maple Leaf, they remain relatively uncommon.
Palladium has extensive industrial applications. However, it is primarily used to produce catalytic converters, giving it a unique risk profile. This means the value of palladium is more closely tied to the automotive industry and non-electric vehicles than any other precious metal.
- Rhodium assets. Rhodium investments typically include the purchase of bullion bars. This precious metal is well-known for its extreme rarity and high price.
Rhodium is used to produce catalytic converters, giving it a similar risk profile to palladium. However, the value of rhodium is far above that of gold, at $4,350 as of November 23, 2023. Although potential returns can be high, new investors should consult a precious metals dealer before investing in rhodium.
2. A Hedge Against Inflation
Inflation hedges are investment assets designed to protect investors (hedge) against the loss of purchasing power caused by inflation. Precious metals have long been considered good hedges against inflation due to long-term investor trust, stability, and global acceptance.
- Long-term trust. Gold and silver, the most commonly traded precious metals, have been used as stores of value for thousands of years. Although platinum has been accepted as an investment asset since the 1970s oil crisis, it is now commonly accepted as a store of value.
- Value stability. Some precious metals are considered safe-haven assets. This means their value remains stable or increases during inflation, market volatility, or geopolitical uncertainty. For example, gold is a traditional investment asset during economic crises or recessions because its value remains stable through periods of turmoil.
- Global acceptance. Precious metals like gold, silver, and platinum, known for their international trade appeal, serve as an alternative to traditional currency. This versatility allows you to exchange them for different currencies as required, regardless of your location.
3. Diversify Your Portfolio
Spreading your investments across various asset classes reduces the risks associated with investing. Not only does diversification help preserve wealth, but it also aims to provide more consistent returns. One of the core benefits of investing in precious metals is their contribution to diversification:
- Each precious metal is an asset class. Gold, silver, platinum, palladium, and rhodium each represent different asset classes with their own market trading. This allows for an independent evaluation of market values and the influence of supply and demand on each type of precious metal investment.
- Low correlation between each metal. The price movements of one precious metal typically have minimal impact on others, making it a relatively secure approach to investing in multiple precious metals for diversification. For instance, if the value of one metal declines due to economic factors, your investments in other precious metals might stay stable or even appreciate.
4. They are a Physical Commodity
Choosing to invest in physical forms of precious metals, such as bars, coins, and jewelry, offers unique advantages compared to non-tangible assets, including:
- Ownership and control. Owning physical precious metals provides the benefit of tangible possession. In contrast to stocks or bonds, these assets are physically handleable, offering a sense of personal control and security, particularly in times of economic uncertainty.
- No counterparty risk. Investing in physical metals eliminates the counterparty risk associated with financial assets like bonds, where there’s a chance of the other party failing to fulfill their obligations, leading to potential investment loss. Physical metals possess an intrinsic value independent of any organization’s financial stability or commitments.
- Privacy advantages. Physical precious metals provide more privacy compared to other types of investments. These transactions usually involve less paperwork and are not as heavily regulated in terms of reporting, offering a more discreet approach to purchasing, selling, and storing these assets.
5. Some Precious Metal Assets are Collectible
Precious metals are a unique asset for investment. They are treasured for their market worth and as collectible items, adding another layer of diversification to your portfolio and enhancing your wealth growth. Examples of collectible assets include:
- Collectible jewelry. Jewelry holds potential as an investment, mainly due to its collectible value. Pieces like antiques with historical significance or limited-edition designs from renowned creators often surpass the worth of their materials. This aspect renders them collectible and a wise choice for investment.
- Numismatic coins. Many numismatic coins are made from precious metals. Their small size and unique appearance make them an excellent choice for collecting and investing. Examples of collectible precious metal coins include:
|1796 Draped Bust Small Eagle quarter
1796-1807 Draped Bust dimes
1838-1891 Seated Liberty quarters
1839-1866 Seated Liberty half-dollar with no motto
1892-1916 Barber silver quarter
1893 Queen Isabella commemorative quarter
1916-1930 Standing Liberty silver quarter
1932-1964 Silver Washington quarter
1946-1964 Silver Roosevelt dime
$1 American Silver Eagle (1 oz t.)
|$50 American Golden Eagle (1 oz t.)
$25 American Golden Eagle (½ oz t.)
$10 American Golden Eagle (¼ oz t.)
$5 American Golden Eagle (⅒ oz t.)
Canadian Golden Maple Leaf
Chinese Gold Panda
South African Krugerrand
|$100 American Platinum Eagle (1 oz t.)
$50 American Platinum Eagle (½ oz t.)
$25 American Platinum Eagle (¼ oz t.)
$10 American Platinum Eagle (⅒ oz t.)
Australian Platinum Koala
Canadian Platinum Maple Leaf
Isle of Man Platinum Noble
|$25 American Palladium Eagle (1 oz t.)
Australian Palladium Emu
Canadian Palladium Maple Leaf
6. They Can Be Easy to Store
Precious metals like coins and bullion are easy to store at home, providing convenience and peace of mind. Unlike many intangible or less accessible assets, keeping these assets on your property allows you direct access and control.
To store them effectively, you use a secure, well-hidden safe that is water and fire-resistant. Organize your precious metals in protective cases or sleeves to prevent scratches or damage.
Choose a storage location that is both discreet and protected from extreme temperature changes to preserve the condition of your items. This storage method gives you the comfort of having your investment within reach and the satisfaction of personally safeguarding your asset.
7.Convert to Cash Easily
Investing in precious metals is beneficial because of their high liquidity, allowing you to quickly and effortlessly transform these assets into cash, often without compromising their value.
Liquidity is vital in financial planning, providing both flexibility and security. Should an urgent need arise, converting your precious metal bullion into cash offers a feasible option for quick fund access. This is advantageous in handling unexpected medical costs, significant life events, or seizing investment opportunities.
Unlike assets like real estate or stocks, which might need more time to sell and potentially result in lower returns, precious metals provide the benefit of rapid and efficient access to your investment.
8.They Offer Tax Advantages in Michigan
Investing in precious metals in Michigan offers tax advantages, making them an attractive investment choice. Certain precious metal investments, such as U.S. government-issued coins and bullion, are exempt from the state’s general sales tax of 6% on tangible personal property.
The exemption, detailed in Michigan Law 205.54s, extends to investment coins and bullion made of gold, silver, and platinum with a purity of no less than 900 parts per 1,000. By avoiding sales tax, you get more precious metal for your money, optimizing your investment capacity. When you invest with AU Precious Metals, you can benefit from this state-specific tax incentive.
How to Get Started With Precious Metal Investing
Investing in precious metals can be a rewarding venture, and AU Precious Metals can guide you through this process. With a reputation for expertise and customer-focused service, we’ll help you get started:
- Contact us. Begin your investment journey by contacting AU Precious Metals. We’ll answer your questions and provide guidance.
- Personal consultation. During your consultation, we will explore your financial objectives, investment timeframe, and risk tolerance and introduce you to different investment choices like coins or bars. Additionally, we’ll cover the advantages and potential risks associated with each type of precious metal investment.
- Make informed investments. Before investing, our team will assist you in evaluating market trends, pricing, and the long-term potential of different precious metals. Once you have decided, we will guide you through a secure and transparent purchasing process.
- Ongoing support. Following your investment, we are available to assist with adjustments to your portfolio, aligning it with your changing financial needs or goals. For instance, we can move your investments to a new precious metal asset or trade in your gold for cash if necessary.
Invest in Precious Metals With AU Precious Metals Today
Diversify your portfolio by investing in precious metal assets today. With AU Precious Metals, you’ll receive personalized insights into which strategy best aligns with your financial goals.
Visit us at our Rochester or Novi, Michigan locations or call a team member today to learn more about the benefits of investing in precious metals and growing your wealth.