The Benefits of Investing in Precious Metals

Investing in Precious MetalsPrecious metals are an ancient symbol of wealth, and investing in these items can be a lucrative way of expanding your portfolio. The most common precious metal investments are gold, silver, platinum and palladium, and you can choose from investment vehicles such as bars, coins, exchange-traded products and individual mining companies. Plus, when you work with an offshore bank such as one in Belize, you’ll be protecting your investment from future economic downturns and domestic crises.

Metal Types

Gold is the most popular — hence the wide-spread use of the term “gold standard” — and is often used for technologies in the electronics industry. Silver is more volatile in pricing than gold but can sometimes be a better investment due to increasing demand; it has new uses in water purification and medicine. The relative newcomer platinum is frequently used in computers and medical equipment, and palladium demand tends to be driven by the automobile industry and catalytic converters.

The precious metal investment you choose depends entirely on your personal financial plans. Gold and silver are generally good for long-term growth, but if the increase in silver’s demand is any indication, platinum and palladium will eventually see their days in the sun as well. Discuss your needs with your broker to come up with the investment plan that best suits your portfolio.

Investment Vehicles

Once you decide which precious metal investments make the most sense for you, you’ll need to choose how to invest. The most classic way of investing in gold and silver is by purchasing bullion bars. These rectangular bars can be stored in a home safe or bank, and they may be more inexpensive than other vehicles.

Another common way to invest in gold and silver is by buying coins. The Krugerrand is the most popular type of gold coin, but silver coins typically fall under one of two types: fine silver or junk silver. The fine varieties are worth the most, and junk coins contain a smaller percentage of actual silver.

Though you can find platinum coins and palladium bars, by far the most popular way of investing in these two metals is by purchasing them as an exchange-traded product. With this option, the metals are traded on worldwide stock exchanges and backed by bullion. You can also find a number exchange-traded notes for platinum; this prepaid contract is a more tax-efficient way of investing in the precious metal.

You can also secure precious metal investments through derivatives and spread betting, individual gold and silver mining companies, and dedicated bank accounts.

Regardless of the metal — or metals — you choose, precious metal investing can be a profitable way of diversifying your portfolio and protecting your future assets. Reach out to the advisers at Caye International today for more information about your Belize precious-metal options.

About this author

Caye International Bank Limited (CIBL) was granted an Unrestricted "A" Class International Banking License on September 29th, 2003 by the Central Bank of Belize and is regulated by the Central Bank of Belize which set the standards for liquidity and capital adequacy.