Three Ways to Invest in Gold and Silver

Making the decision to start investing in precious metals is a smart one, but it is only the first step. The next decision you will need to make is how to purchase your gold and silver. You have more than one option, each with its own advantages and disadvantages. In this article I’ll cover the three basic ways you can start adding gold and silver to your investment portfolio.

Mining Stocks. The first way is the simplest and the most common. This is how your investment advisor would probably advise you to invest in gold and silver, by buying the stock of companies that explore and mine precious metals. When most people think of investing they think of buying stocks, bonds and mutual funds through either their 401K or Individual Retirement Accounts (IRA’s), which makes this option seem like an easy choice. There are several gold and silver mining companies whose stocks are traded on one of the stock exchanges. There are also mutual funds that specialize in various segments of the mining industry – gold, silver, platinum and even the more exotic metals. Buying gold by investing in mining stocks is an indirect way of diversifying into the precious metal field and it has the advantage of being easy and familiar – buying one stock is just like buying any other.

As the demand for hard assets increases this can be a very profitable way to diversify your investment portfolio and take advantage of the relative strengths of the precious metals market. The chief disadvantage is that individual mining stocks often move with the general stock market which might not correspond with the price of the metal. The situation might arise where gold and silver are rising in price while the mining stocks are going down. Continue reading “Three Ways to Invest in Gold and Silver”