Any wise investor knows that one of the keys to good financial health is investing in a diverse number of types of goods and assets. Most investors with a diversified portfolio have a portion of their finances invested in gold and silver. There are a number of reasons why metals are such a popular and long standing form of investment.
Protection Against Inflation
One thing that makes metal investment unique is the fact that metals are resilient against the devaluation of money caused by inflation. Historically, in economies where inflation has occurred, the purchase of metals has soared. In the 1970’s in the United States, for example, when inflation reached historical highs, investment in silver and gold bullion soared. This is because unlike paper money, gold and silver do not lose their value when paper money is printed in abundance, and, on the contrary, they often go up quite a bit in value when other types of investments go down. This is why many investors with a large amount of money to work with will use the purchase of silver or gold to “hedge” against inflation. This is an excellent way of minimizing any loses that may occur as a result of paper money investments losing value. This can lead to major financial gain, particularly when the market does begin to recover and metal investments can be sold off at a much higher price than they were purchased at.
An Investment That Lasts For Generations
One major benefit that metal investments carry is that they are so durable, both financially and in terms of their actual physical make up. Unlike investments like property, gold and silver never need to be maintained or lose value because of their physical state. They also can withstand major highs and lows in the market place, and even when metals fluctuate down, it is almost certain that they will, at some point, become more valuable. This is why gold and silver are such an ideal investment for a person who would like to invest not only in their own future, but in the futures of their children and grandchildren. Gold and silver can be passed on from generation to generation, and collectible coins like Canadian Maple Leafs are as aesthetically pleasing as they are a sound investment, which makes them an heirloom, much like jewelry that can hold emotional significance.
The Value of Gold and Silver is Recognized World Wide
Another very compelling reason for investing in metals is that their value is recognized in virtually every area of the world. This is an asset that almost no other type of investment can offer. In the current global environment, there is little certainty as to how currencies like the U.S. dollar will hold up against other currencies. This is because global events are continuing to unfold which may make one currency stronger or weaker against the dollar at a moment’s notice. For this reason, individuals who are looking to invest globally or who may be interested in eventually investing in international assets are often very interesting in keeping some of their assets in gold or silver. Unlike paper investments, gold and silver are much less subject to the fluctuations that may occur of the dollar against other currencies.
Bullion Vs. Coins
One important factor that investors must always consider when putting together their metal portfolios is whether they are looking to invest in coins or bullion. Generally, bullion is seen as a more stable and lucrative investment because the value of a bullion bar is exactly equal to value of that metal on the market. Coins to not always contain pure metals, and thus often have lower “melting” values than bullion. On the other hand, many coins do have value because of their collectibility value, and a small number of coins have values that are slightly higher than their straight bullion value. Many investors who intend to keep their metals over the course of a long period of time or who intend to pass their metals down to the next generation may choose to purchase some of their gold or silver in the form of coins because of the sentimental value of the coin itself.
An Exciting Form of Investment
Many people who enjoy investing in metals take interest in watching the market and assessing whether they should buy or sell part of their metal holdings. Much like the stock market, the gold and silver market can be quite fascinating to track. Unlike many other forms of investment, the potential value of a piece of bullion is constantly changing, which means that there is always something to learn from the market. Many investors enjoy learning about the value of their metal portfolios and the ways in which global politics may bring value to their investments.