World financial markets continue to fluctuate based on fear and chaos. Political and economic instability have contributed to volatile stock prices. While some investors have flocked to commodities, those investments have their own risks. Precious metals also have inherent risks, but they provide long-term stability in a way that no other investment does.
The precious metals investment outlook for 2013-2014 appears to be improving in direct correlation to increased uneasiness of stock investors. There are two primary reasons to take a look at precious metals as a relatively safe and lucrative investment.
First, global instability has resonated with investors. Stock markets have been reaching record highs in 2013, at the same time as elevated unemployment and federal debt levels continue to raise concern about the strength of this recovery. The inside story shared among major investors is that there is an expected correction on the horizon. Major investors are insulating themselves by taking profits and increasing their percentages of portfolios held in cash and cash-like assets. Certain precious metals are becoming an increasing allocation of this mix.
Cash is good because it cannot drop in value like a plummeting stock can. It is bad because it continues to depreciate with inflation. Currency devalues while precious metals maintain their intrinsic value. They do not drop with inflation. Savvy investors expect that the precious metals that make up a portion of their investments will provide protection from this expected stock price correction. This movement into the ETFs and futures that are based on precious metals is improving the precious metals investment outlook.
Increased Demand for Industrial Use
The second primary driver for increasing prices in precious metal markets is that the companies that rely on them for industrial purposes continue to increase production. While their stock prices are expected to correct down as much as 10% or more, their output is not expected to drop. Manufacturers rely on these materials for the high end electronics found in automobiles, cell phones, tablets and other consumer goods for which demand continues to skyrocket. These products rely heavily on platinum, silver and gold which make up many of the sensitive circuits contained within them.
The precious metals investment outlook is positive for both buyers of physical metals and those who purchase ETFs and other “hands-off” precious metal investments. This is an attractive option to investors who want to increase their stake in precious metals without having to physically possess the metals themselves. The precious metals investment outlook for these futures and ETFs improves in correlation with the increased value of these materials.
To take advantage of the improved precious metals investment outlook, invest with confidence in highly rated assets that count gold, silver, platinum and palladium as major components. These investments could be based mostly on the value of the metals themselves, or they could be based on the miners that generate new quantities of the metals that will enter the market at an expected high price. The precious metals investment outlook of mining companies is also gaining steam.
If you are concerned more about the political and economic instability that could roil currency markets in coming years, then owning silver or gold bullion could help insulate you. It is not just the doomsday bunker builders that are buying up gold and silver to put alongside their guns, ammunition and food stores. Millions of concerned citizens are also storing precious metals in a home safe or even in a safe deposit box at their bank. This is driving the precious metals investment outlook even higher.
As markets continue to fluctuate through 2014, don’t get burned by a major stock market correction. Insulate yourself with a portion of assets that can preserve and increase in value even as stocks drop. The precious metals investment outlook moving into 2014 is optimistic.