Why and How to Invest in Precious Metals

Humans have been storing their wealth in precious metals since time immemorial. Such metals remain a valuable form of investment to this day. In a survey, people of the USA revealed that  10.8% of them owned gold, whereas 11.6% owned silver. This response was prominent among millennials and indicated a growth as compared to the previous year. This positive shift in attitude is grounded in strong reasoning.

With economies proving shakeable, especially after the Covid pandemic, people have been looking for alternative investment opportunities to ensure they diversify their sources of income. In this regard, precious metals are proving themselves to be valuable assets. Here are some arguments backing them up:

1.   They’re Timeless

One of the most alluring benefits of precious metals is their intrinsic value, for which people have always wanted them. They are used in everything from electronic devices to medicine to art; the demand for metals like gold will not die abruptly. This timelessness that these metals have always displayed makes them invaluable as short and long-term stores of wealth. When you invest in them, not only will you have a chance of profiting when the market shows change, but you can also rest assured that you won’t suddenly wake up with a crashed market that plans to stay like that for a long term.

2.   They’re Accessible and Liquid

Precious metals are easily accessible, no matter which part of the world you live in. Opening a precious metal IRA is a fairly straightforward process, and costs less than many retirement plans. Unlike investments like real estate, you do not have to worry about spending time on finding the right buyer: the market for gold is a vast one, so you can sell it swiftly if you need cash.

3.   They’re Non-Correlated Assets

One of the most significant advantages precious metals offer is that they have low correlations to equities and income. If the value of your other investments, like stocks, is falling, precious metals may not be displaying the same trend, so your wealth will be protected. The correlation of gold, in particular, is known to change with respect to the overall market and becomes lower in times of turmoil. This makes it valuable to investors looking for portfolio diversification opportunities.

Opening a Precious Metal IRA

You should familiarize yourself in detail about investing in precious metals before making up your mind. We’ll outline the basics below. Precious metal IRAs fall under self-directed Individual requirement accounts that offer more investment options than conventional IRAs. Note that your metals will have to meet the following purity criteria:

• Gold should be 99.5% pure
• Silver must be 99.9% pure
• Platinum must be 99.95% pure
• Palladium must be 99.95% pure

You will have to do the following:

1. Choose a Self-Directed IRA custodian approved by the International Revenue Service (IRS) to hold your IRA
2. Extensively research reputable precious metals dealers and choose one that your IRA will purchase your metal products from
3. Select a depository as per the Internal Revenue Code’s requirements to store your precious metals

Once you have a guardian, a dealer, and a depository, you’re good to make transactions.

Endnote

Precious metals are valuable investments because of their timelessness, accessibility, liquidity, and non-correlated nature. They can let you diversify your portfolio to spread out your risks.  If you own a 401K account, you can follow the linked page to look more into how to move a 401K to gold without penalty. You should note, however, that every individual has unique retirement and investment plans. You need to research your options in detail as now there are many to choose from.