Reasons For Investing
3 Reasons to Own Precious Metals Now
Many investment experts have long recommended portfolio diversification and that 10% to 20% (and sometimes more) of an investor's assets be devoted to tangible assets such as gold, silver, platinum and palladium bullion and bullion coins. In today's uncertain political and economic environment, there are many (and very sound) reasons to consider investing in precious metals now. Here are three:
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Precious Metals vs. the Declining U.S. Dollar
1The value of a dollar in 2020 is lower than it was in the early 21st century for a long list of reasons, including massive increases in U.S. government deficits totaling trillions of dollars, the cost of a prolonged war against terrorism, a massive trade imbalance, and a global pandemic, among others. Investments related to the U.S. Dollar assuredly will be worth less and less over time. Gold, silver and platinum, though, are held and traded throughout the world and their purchasing power is not directly dependent on the value of the U.S. Dollar. As has occurred many times, as the value of the U.S. Dollar declined, gold and silver prices and the value of precious metals expressed in dollars has increased.
Precious Metals in Times of Uncertainty
2Today's financial markets are increasingly at risk from terrorism, the coronavirus, political instability and war. As we saw after tragedies like 9/11 and during the current global pandemic, financial markets can be closed down, and very significantly impacted, for extended periods of time. As uncertainty and fear surrounding these events continue to grow, it is not unreasonable to expect further disruptions in financial markets, banking and commerce in the future. Whenever and wherever tension or hostilities break out, people everywhere quite naturally gravitate toward the assets they trust most. And today, even in our high-tech-driven 21st century, an asset class millions rely on in times of trouble is gold and silver. Precious metals have always been, and likely will continue to be, a valued investment in both good times and bad.
Precious Metals’ Price Appreciation and Profit Potential
3Between early April of 2001 and early September of 2011, the price of gold increased from a low of approximately $250 per ounce to a high of nearly $1,900 per ounce - an increase of over 600% in about 10.5 years. During a similar time period, from late November of 2001 to late April of 2011, the price of silver increased from a low of approximately $4.00 per ounce to a high of over $48.00 per ounce - an increase of over 1100% in 9.5 years. These are two historical examples of the long-term price appreciation possible in the precious metals markets. Also notable is that recently, there have been periods of significant price volatility in the precious metals markets where prices have moved suddenly and dramatically, both higher and lower. In such uncertain times, precious metals can produce impressive short-term investment returns as well. And many financial experts have predicted and continue to forecast volatile gold, silver, platinum and palladium prices in the months and years ahead.