Investing in Precious Metals

by Charlotte Wood
(last updated February 21, 2009)

I love it in the movies when you see gold in bars or in mounds of coins—it seems like such a sign of decadence and wealth! Amazingly enough gold bars and coins actually exist and you can find them as investment pieces. One of the more stable forms of investment in today's world is in precious metals—gold, silver, bronze, etc. If you know how you want to invest in these metals and how to go about it then you could be set for a most excellent investment piece.

There are five ways to invest in precious metals:

  • Actual bars and coins
  • Precious metals mutual funds
  • Certificates
  • Futures
  • Stock in mining companies

Each of these investment methods has its own set of advantages and disadvantages. Actual bars and coins are self explanatory as to what they are and if you're interested in that route, you'll need to shop around for metals dealers who operate in your interested area. If you choose to invest in coins, familiarize yourself with the numismatics market or what is of value regarding the design and condition of the coin. This aspect of coin investment is just as important to understand as the actual metal. With coins and bars, however, you will need a secure place to store your investment. If you want to avoid having to store anything you can opt for metals certificates. Certificates verify ownership of a specific metal and its quantity.

Mutual funds are the most stable form of precious metal investment because they are diversified and managed by professionals. This form of investment is the most under control and the one that is best for you if you want a high yield with a low risk level. Stocks in precious metals are basically like any other kind of stock; you buy into a company and your success with that investment is dependent on the success of the company.

Futures are a more risky alternative and are basically contracts to buy or sell a specific metal at a specific price in the future. Your success is contingent upon how the value of the metal changes over time; this is the most unstable form of precious metal investment.

Precious metals can be a valuable investment that can yield fiscally pleasing results and it's relatively safe. You generally have more control and you don't take as high of risks so you money is more secure. If you can just acquaint yourself with the market and with whatever form of investment you choose to follow you shouldn't have too much difficulty achieving some level of investment success!

Author Bio

Charlotte Wood


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