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Is a Volatile Market Turning Investors to Precious Metals?


On March 16, 2020, the Dow Jones Industrial Average dropped nearly 3,000 points in one day, marking the biggest one-day drop in the Dow in history. Since that time, the market has rebounded in ways no one imagined and continues to sustain a bull run with only minor hiccups.

 

But with the rise to all-time highs in the stock market lies uncertainty and volatility. Even as the market continues to rise, many stock market experts and pundits continue to spread fear, uncertainty, and doubt over a so-called inevitable market crash. While many investors balk at these fears, volatility and cyclical movements in stocks persist.

 

That’s why many investors are choosing to diversify their portfolios with other investments, including precious metals. As a hedge against inflation and volatility, few other investments can match what precious metals provide. Let’s take a look at why you may want to follow suit.

Why Precious Metals Are a Great Investment During Market Volatility

Known as safe-haven assets, precious metals can provide value in the event of a stock market crash or instances of extreme volatility. The reason for this value is due to the fact that the value of these assets tend to rise during crashes as more investors pile money into them after selling securities.

Furthermore, precious metals have practical applications in everything from electronics to cars, making them a valuable asset to possess, especially as demand rises.

What Precious Metals You Should Invest In

Although precious metals are typically synonymous with gold and silver, the market for precious metals has expanded due to the practical applications of other types of metals, namely platinum and palladium. Here’s a look at where you can put your money and which type of investment may work for you.

Gold

Gold has been used as a symbol of wealth and as currency for thousands of years. In the modern age, it still has significant intrinsic value. While the price can fluctuate, gold is an amazingly liquid asset, meaning you can sell it with ease if you need cash. However, it’s rather expensive, meaning that you may need to have plenty of cash to make gold a worthwhile investment.

Silver

Silver is another strong investment, as it’s highly liquid due to its industrial purposes. This metal is widely used in solar energy, electronics, brazing, soldering, and the automotive business. As a result, it’s a great hedge against inflation and maintains its value, especially in a bear market.

Platinum

Historically, the price of platinum has been higher than gold, but that’s not entirely what makes it a great investment. Platinum is used in catalytic converters, which are found on all gas-powered vehicles. Due to its usage, it maintains solid value and stability and is rarely subject to spikes in price like silver or gold.

Palladium

Palladium has similar industrial applications as platinum, although it’s not used in jewelry as you’d find with other precious metals. Nevertheless, the high demand of palladium makes it an attractive investment and another layer of diversification for investors.

Diversification Is the Harbinger of Wealth

If you want to achieve wealth by your retirement age or even before, diversification is essential. However, this isn’t just a diversification of stocks and bonds. A portfolio containing a fair share of precious metals can provide a hedge against volatility, inflation, stock market crashes, and a struggling economy. So whether you decide to invest in a precious metal ETF or bullion, you’re making a sound choice for your financial health and your future.

 

At London Coin Galleries of Newport Beach, we can help you purchase these precious metal commodities, there are minimum purchase requirements for certain precious metals.  Those requirements fluctuate based on current supply and demand.  Always, contact us first to discuss and book a private appointment.  Whether you want to sell, buy or trade precious metals and coins.  We can help as your trusted coin dealer in Orange County.



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