Many investors start building their portfolios with stocks and bonds; however, they soon realize the need to diversify in order to guard against the fluctuations of the current market. Many investment analysts have been suggesting that between ten and twenty percent of an investor’s portfolio should be comprised of tangible precious metals. Yet even with this expert advice, some are not heeding the warning.
In the recent economic downturn, we have seen that many have lost a good deal of their fortunes due to risky investments that weren’t hedged by tangible commodities. In turn, financial planners are making it clear to their clients that they must incorporate precious metals in their investment planning. This is the best way to plan ahead for the inevitable wave of financial downturns that are likely to plague us again before retirement. Consequently, the smart investor who wants to successfully plan for retirement will be wise to heed the call and invest some of their portfolio in the precious metals market.
Gold and Silver Remain Strong
One of the best ways to begin investing in the commodities market is by purchasing gold and silver.Gold and silver are the most commonly traded precious metals, and there is a large market for them once the investor wants to liquidate their investment. Additionally, gold and silver are finding increasing uses amongst the high-tech industries of the modern age, creating greater value in them as their inherent wealth increases.
Gold is the cornerstone of anyone considering investing in precious metals. Investment analysts suggest that anyone deciding that they want to begin investing in gold and silvershould focus primarily on gold. Gold should be the largest segment of your precious metals portfolio, since it is the most traded precious metal and has enjoyed a strong rate of growth over the past five years. Since the economic downturn, gold has become increasingly popular as a bulwark against the volatility in the stock market.
Additionally, gold has a myriad of different uses in industry and is becoming increasingly important in consumer electronics. Gold has excellent conductive properties and is not affected by corrosion, and these qualities make it very valuable to high-tech industry applications such as computers and televisions. Consequently, given the increased consumer demand for these products, there is a corresponding demand for the gold that goes into many of their component pieces. This drives up the demand for gold, and due to a relatively consistent supply chain those who are currently holding investments have seen prices spike.
Financial planners who have clients investing in gold and silver typically suggest that the client devote a portion of that investment specifically to silver. Gold will occasionally have a decline in value, spurred by interest rate or inflation fluctuations, so silver can help to temper any losses. This will even out your investment and create strong and sustained growth. Additionally, since silver is highly sought after for its own industry uses, it will enjoy growth as well.