5 Investment Risks To Avoid When Buying Precious Metals

The precious metal market has long been popular for many investors. There’s not a lot that outperforms gold as a hedge against inflation, while other precious metals like silver, titanium and platinum offer potentially good returns. If you are new to the precious metal markets, here are a few risks that you should avoid.Investment Risks

  1. Zero Dividend – Prior to acquiring gold or silver bullion, you should understand that there are no dividends when you hold precious metals. The value by weight will rise or fall, depending on many factors. If you are looking for a dividend or income, there are better investments than precious metal, but if you are looking for an asset that will steadily increase in value, then gold is ideal.
  2. Zero Market Knowledge – If, for example, you want to purchase a few kg of gold bullion, you need to define your investment goals and take a good look at the history of gold prices. When you buy gold coins Adelaide has on offer, for example, it’s always best to go to a reputable dealer and also consult an expert on how this type of investment works. If you are more interested in silver or titanium, these are niche markets that can be impacted by many factors. Make sure that you have a basic understanding of how the market works and tread carefully! Find dealers near you through a quick Google search.
  3. Using A Third Party – If you are approached via email and a company is offering you precious metal trading options, you have no need for such an organisation; register with a well-known bullion dealer and trade through their network, which is secure. There are a lot of brokers offering services, which you can use, but at the end of the day, there is a cost and with so much information online, you can do your own research. Indeed, a few hours every weekend would see you become knowledgeable about a specific market.
  4. Paper Trading – If you are a private gold investor, you are advised to take physical possession of your bullion and store it in a vault at a security facility. Locate a reputable gold bullion dealer and arrange to visit their offices and you can pay in any currency. While traders use paper because physical possession would be impossible, not so for the person who wants to store some of their wealth. Possession is everything with a tangible asset such as gold and by forging a relationship with an established bullion dealer, you can buy or sell at any time.
  5. Over Investing – One should never keep all one’s eggs in the same basket and while precious metals offer a steady investment, you should have other assets and investments that generate an income. If you have shares in a company and the market is uncertain, now is the time to sell and move your wealth into gold or silver.

The majority of market gurus are pointing out that gold is starting a roll and the best time to climb aboard is at the very outset. The pandemic is still raging and new variants are emerging and this tends to send global markets into a panic. Investing in gold now will ensure that your wealth grows and is as safe as it could be.