Five Tips When Buying Precious Metals
A few important things to keep in mind when investing in gold, silver, platinum, and palladium products.
As the economy continues to fluctuate and financial markets continue to suffer from volatility, smart investors are looking for viable alternatives in which to place their money. One of the major alternatives to stocks, bonds, treasury bills, and real estate for investors to consider is precious metals, such as gold, silver, platinum, or palladium. But what are the risks associated with adopting this strategy? What should people look out for when contemplating such an investment? What are the best ways to gauge quality and long-term return on investment where precious metals are concerned? By means of answering all these questions, the following is a concise guide of five tips to keep in mind when buying precious metals, as presented by Endeavor Metals Group.
Know the Risks
To begin with, although precious metals are one of the oldest safe havens in which to invest, doing so is not without risk. Much like other widely-traded commodities, the value of precious metals is constantly changing depending on the state of the markets. For example, the price of gold can increase in value for ten straight days, only to decrease in value for the following ten days. However, that being said, buying precious metals is traditionally recommended by financial industry professionals as an excellent way to hedge against sudden downturns in stocks and other financial instruments. Usually, when the bottom falls out of the Dow Jones, NASDAQ, and the other major markets, savvy investors run to purchase precious metals to safeguard their wealth.
Understand Why Precious Metals Are Valuable
When purchasing any investment, it’s important to understand why it holds value, as this knowledge can better enable an investor to evaluate its future performance. The value of precious metals lies largely in their relative scarcity, and because of that, their proven ability to act as a stable mainstay when measured against other currencies and financial instruments.
Beyond that, precious metals have industrial functions, as well. Gold, for example, is an excellent conductor of electricity, while silver is a key component in batteries and superconductors. Meanwhile, platinum is used extensively in auto production, and palladium is an important material used in a wide variety of industries, including dentistry, medicine, and chemical manufacturing.
Understand How to Gauge Quality
As with all high-value physical investments, gauging the quality of the items in question is crucial. There are some easy ways to discern if precious metals are genuine and pure, or made from a much less valuable mineral composites. First, precious metals weigh more than composites, so sometimes simply lifting an item can provide insight into its quality. Second, precious metals are not magnetic, so holding a magnet against an item can provide insight, as well.
Further, gold has certain characteristics that gold composites do not. It will not scratch glass. When rubbed against a cloth, it will leave no mark, and it does not tarnish or rust. Silver will feel warm to the touch. In fact, silver conducts heat energy so well that it will melt ice. If the veracity of an item purported to be made of pure silver — such as a kettle or coin — is in question, placing an ice cube on top of it will often settle the dispute. Platinum, meanwhile, is extremely difficult to scratch, so purity can often be gauged by running a stone over a platinum item. If it scratches easily, odds are it isn’t very pure. With palladium, determining the purity of an item may require a special testing kit.
Be Prepared to Hold the Investment for the Long-Term
Simply put, buying precious metals is a long-term investment. Although some moderate gains can be made by investing in gold, silver, platinum, and palladium in the short-term, any significant appreciation in value usually takes place over a longer period of time — usually five to ten years. Much like real estate, the value of precious metals may rise and fall over the course of weeks and months, but as the years pass, the value tends to increase steadily and consistently.
Choose a Reputable Company
Finally, when it comes to investing in precious metals, it’s important to be mindful that not all firms and dealerships are created equal. While well-established and reputable companies can assist in growing an investor’s personal wealth immensely, the precious metals industry is also known for attracting some dodgy, fly-by-night players interested only in making short-terms gains for themselves at the expense of their clients. Before investing any hard-earned money with a firm or a dealership, it is advisable to conduct thorough research into its operations, including speaking with previous clients.
Endeavor Metals Group is a precious metals firm specializing in physical gold, silver, platinum, and palladium products such as bullion bars, numismatics, and commemorative coins. In the last decade, Endeavor Metals Group has grown extensively, emerging as an industry leader in the precious metal sector. Endeavor is a member of the Numismatic Guaranty Corporation (NGC), Professional Coin Grading Service (PCGS), ANACS, the Industry Council of Tangible Assets (ICTA) and the prestigious Silver Institute. Furthermore, the company is a United States Mint, Perth Mint, and Royal Canadian Mint authorized precious metal dealer. Lastly, Endeavor has a five-star rating on Google, A+ accredited grade with the Better Business Bureau, and is fully licensed, bonded, and insured.
Whether an experienced investor or a first-time collector, the company guarantees a spectacular customer experience every time. Beyond the finest precious metals products, Endeavor Metals Group clients can look forward to detailed precious metal market updates, personalized precious metal portfolios, competitive product pricing, full transparency, and premier client service. The company has two conveniently located offices in South Florida: its headquarters in the financial district of West Palm Beach, and a newly opened branch in the heart of downtown North Palm Beach.
