If you check out the latest financial news, you’ll find gold value is on the rise. With this news, many people want to add precious metals to their investment portfolio. In 2019, gold rose to over $1,500 per ounce. People are wondering if investing in precious metals is a good idea in 2020. Some say investment in precious metals offers too much uncertainty. Meanwhile, others investing in metals such as gold and silver are doing well.
There are no hard and fast rules when it comes to investing in precious metals. It all depends on the economy. If you’re thinking about investing in precious metals, there is a little you can learn to ensure you make a smart investment choice. Here’s what you need to know to make smart investment decisions in precious metals this year. While this article explores investing in precious metals, it does not constitute investment advice.
Investing in Precious Metals a Good Idea in 2020
When you invest in something, whether it be precious metals or businesses, you’re having your money work for you. Investing is a way to grow your capital by allocating money into different assets. As you grow your investment portfolio, you will find many ways to invest. Some investors prefer currencies and stocks but also invest in hedge and mutual funds. Then some invest in precious metals. What’s unique about investing is you can grow your capital and make money without having to work more than you already do.
Precious metals are less stable. All precious metals rise and fall, some more than others. Between 2011 and 2019, metals such as silver and platinum steadily declined while palladium began to rise. But if you take a look at the value of gold during the recessions of 2001 and 2008, gold continued to do well. If we do have a recession on the horizon you can expect Gold and Silver to fare well according to past history.
Investing in Precious Metals
Hedging your investments is a strategy to protect your money from risky situations. If your asset loses value, a hedge can help offset this value loss, a lot like insurance. While hedging in precious metals won’t protect you from losing money in all situations, it will reduce the chances. Much like holding an insurance policy against possible unseen events precious metals reduce the risk.
Investing in Silver
Silver is another popular precious metal. It’s worth a little less than gold making it an easier option to invest in for first-time investors. You can grow your portfolio by making small investments. Silver is more widely used in industrial purposes. Solar energy, medicine, and technology industries all use silver in their products. The downside to investing in silver is you need to invest or purchase more silver compared to gold or platinum. You’ll need more space to store your silver.
As for investing in 2020, investors believe silver is a good option. Silver may be slow to start, but when it starts growing it will accelerate. In the past silver has spiked above gold and investors believe silver will do the same in 2020. Silver futures are rising in the open interest market and longs are outdoing shorts. Usually this means investors are betting on higher prices.
Investing in Silver in 2020
All the evidence is pointing towards a good investment year for 2020. Regardless if the economy grows, falls or just stays in a quagmire of uncertainty Silver should bode well. Silver has all the bases covered so to speak. It has been in a slump for years which from a contrarian point of view bodes well. Also geopolitical turmoil seems to be heating up around the world. Central banks are hoarding Gold which will make silver more desirable. Also the decade is on the brink on a massive move into alternative energies in which silver is used.
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