In recent years, we have seen more and more people go into precious metals investing for several reasons. They are tangible assets that investors can see and touch and many people find that a lot more reassuring than other intangible investments like stocks, for example. There’s also that extra benefit of being able to adorn one’s self with them, if one chooses to invest in say, gold jewelry, for instance.
But the main reason why many people are turning to precious metals investing these days is because of how stable they are when it comes to price-performance and value growth. Historically, these assets have been shown to hold their own against economic and financial crises that sent other markets such as the stock market crash. Their value is intrinsic which means that for the most part, their worth isn’t directly tied to the performance of any economy.
Moreover, investing in these assets is quite straightforward, unlike other investment options out there. One only needs to purchase the asset and store it securely and in accordance with the laws that apply. We say laws that apply because certain ownership conditions may affect how and where you can store the asset. For instance, if you buy gold under your Individual Retirement Account (IRA), you’re forbidden by the IRS to store it at home. Visit https://www.investopedia.com/ to learn more about the IRS.
However, you’re free to store the asset wherever you like if its purchase has nothing to do with your IRA. That said, storing precious metals at home does expose you to security risks like robbery. You might be better off keeping the asset in a safety deposit box or hiring a third-party storage firm, depending on the quantity.
But while investing in precious metals is as simple as making a purchase and deciding the best storage option, doing the actual buying can be tricky. There have been multiple cases of people losing their money to fake precious metals dealers, especially online. If you’re considering investing in precious metals, you should find this article very useful. We’ll be discussing how to find reputable dealers to avoid being scammed. But first, let’s look at why you should only transact with reputable dealers.
Why You Should Only Deal with Reputable Dealers
First off, you may be wondering why we’re even talking about this. It should be a no-brainer, right? Well, some people often transact with less reputable dealers because they often sell below market price. While that might sound like a good thing, it actually isn’t. Precious metals that are sold below market price most likely won’t have the level of purity that their sellers claim they have. So, you think you’re getting a great deal when in reality, you’re paying more for less.
Also, most recognized precious metals companies have a return policy which is always a nice option to have. However, it is worth noting that terms and conditions often apply. Finally, a reputable dealer is always open to buying back the asset from the customer. That is, if in the future you wish to liquidate the asset, you don’t have to go around looking for a buyer. They’ll buy back your gold, for example, at the spot price.
Best Precious Metals to Consider for Investment
Gold is probably the number one option for most people and that’s because of its value and usefulness across different industries. Other precious metals that are popular among investors are silver, palladium, and platinum. Now, you can choose to purchase these in bars or coins but the latter might be the better option. When it comes to storage, bars can be quite the headache as they are large and take up a lot of space. The cost of transporting them isn’t cheap either. In terms of liquidity as well, coins are much easier to liquidate than bars which are something you might want to consider if you want greater flexibility with cash flow. Click here to learn more about the use of gold in industries.
How to Find Reputable Precious Metals Dealers
There are several ways by which you can find legitimate and trustworthy precious metals companies to do business with. Here are a few of them:
Ask Your Bank Account Officer
Banks are one of the most credible and trustworthy institutions in any country. They value their reputation so much and do everything in their power to improve and protect it. Therefore, they only transact with accredited and legitimate companies that also value their reputation. So, if you approach your account officer at your bank for recommendations, you can be certain that the companies you’ll be directed to are reputable and licensed precious metals dealers. What’s even interesting is that some banks are dealers themselves and yours might just be one of them.
Check Online Review Sites/Dealers’ Websites
If you’re more of the “do stuff online” type of guy, you most likely are already familiar with reviews and how much one can learn about a brand, product, or service from them. Review sites like Yelp, Better Business Bureau, and Angie’s List are packed with reviews from customers that have used the service or product of companies.
On these sites, customers share their experiences with a business and you can quickly get an insight into what to expect from these companies. But bear in mind though that some companies pay people to write fake positive reviews about them. Usually, these fake reviews are one-line sentences that don’t really give any specific insight into the company and its services. Authentic reviews always say something about the company, like how professional they are, the quality of their product/service, and so on. Some sites are even dedicated to reviewing precious metals companies. Check out Cayman Financial Review to learn more.
So, in addition to reading reviews, you might want to further dig into those precious metals companies that you’re interested in. You can do that by checking out their website and social media. Legitimate companies usually list on their websites the recognized industry associations that they belong to, such as the United States Mint, the Professional Coin Grading Service (PCGS), and Numismatic Guaranty Corporation (NGC), and so on. Finding information like this on a company’s website is a good sign as it is almost impossible for scam companies to join these associations.
Final Thoughts
Like every other type of investment, caution is advised when it comes to buying precious metals. Telling the level purity of these metals can be challenging, especially for new buyers. This is why extra steps should be taken to ensure that whosoever you transact with is trustworthy. Finally, experts advise that precious metals investing should only be used as a means to diversify one’s portfolio. This is because while these assets are relatively quite stable, they do not provide as many returns as stocks and so on.