These five tidbits of precious metal investing wisdom will help you start off on the right foot

The chronic lack of faith in the US dollar has contributed to the rollercoaster value of the paper currency throughout the decades. For many precious metal investors, their goal is to protect themselves from the inevitable effects of inflation.

Popular types of precious metals include:

  • Gold - the most recognized symbol of wealth around the nation. Long ago, it was used as currency before state currencies and paper money were established.
  • Silver - more affordable than gold, yet still valuable in many industries. The electronics industry relies on silver because it has the highest thermal conductivity compared to any other metal.
  • Platinum - used in medical equipment, computers, and many automotive parts.
  • Palladium - able to withstand extreme weather conditions and is used in water purification and oil refining.
  • Copper - considered more of an industrial precious metal due to its many commercial uses.

If you choose to buy one or more of these precious metals, you must find the best strategy that supports your investment goals. Here are five pieces of wisdom for the blossoming precious metal investor.

1. Research the Precious Metals Market

Before you start investing in precious metals, start off by researching the long-term price trends of gold, silver, and other precious metals. For starters, take a look at our spot price charts and set up a market alert for the metals that interest you.

After browsing our Bullion Buying Guide, start digging online for relevant, respected information about investing in precious metals. There are a ton of resources online to take advantage of and lots of people have plenty of opinions on the subject, so it’s okay to spend a bit of time getting educated.

2. Consistently Track and Analyze

Once you start getting the hang of market trends, history, and where its currently at, purchase the assets of your choice and begin tracking your precious metal investments consistently. Consider using tracking software tools to continually analyze the changes in the value of your metals.

Online brokerage accounts can help you check up on your precious metals holdings every day. If your investments continue to grow steadily, you might consider consulting with a financial advisor. For a fee, your financial advisor will oversee all of your investments and advise you on where you need to make adjustments. The market changes frequently; when it does, you should adjust your portfolio accordingly.

It’s also important to mention that while tracking and analyzing your overall precious metal investment is a good idea, you shouldn’t stress out about day-to-day changes. Daily spot prices will swing up and down; this is completely natural and you shouldn’t fret over it. What you want is a “big picture” view of your investment.

3. Review Long-Term and Short-Term Strategies

There are many different ways people make money from their precious metal investments. For instance, some investors choose to hold onto their physical gold, silver, or platinum investments as part of a long-term strategy for those who feel the price of the metals will increase in the future.

For others, a short-term strategy is preferred, so they sell yearly when their metals have slightly appreciated. A lot of investors have made good money using their gains to reinvest in other rising star metals.

Still other investors buy precious metals in order to act as a more reliable store of their wealth. Diversifying your investment portfolio with precious metals helps protect against inflation in the long-term.

In the end, you must consider your reason for investing in precious metals in the first place and choose a strategy that works best for your needs and goals.

4. Diversify Your Portfolio With Low-Risk Precious Metals

Precious metals are an investment that you want to hold onto due to their inherent value. One of the best strategies is to diversify your portfolio by including low-risk precious metals like gold and silver.

Banks may be interested in borrowing your silver and gold instead of owning it outright. This way, they are not owning the precious metals at a fixed price. It also helps keep their cash consumption down. When banks lease, they are giving their business more flexibility when it comes to managing their funds.

5. Strategies for Investing in Minted Coins

Investing in US minted coins is becoming increasingly popular. Before you start investing, it’s important that you understand the difference between bullion and numismatic coins. US minted bullion coins come from silver and gold and make up a large percentage of precious metals. Rare coins are called numismatic and are usually procured by the collector. The value of numismatic coins are based on their age, rarity, and beauty.

If your strategy is to invest in something tangible and simple, bullion coins are the way to go. If you enjoy collecting coins as a hobby, then commemorative or numismatic coins may be what you’re looking for.

Whichever type of coin you decide on, always keep your coins in a safe and secure location. Consider storing them in a safety deposit box or safe at home.

When looking for minted bullion or numismatic coins, stick with a reliable coin dealer that you trust. If you have never worked with a coin dealer, get recommendations from friends or other coin collectors. Experienced coin collectors can steer you clear from fraudulent dealers and businesses.

Learn how to choose a trusted precious metal dealer.