Anyone looking to increase the value of his assets can find thousands of suggestions and ideas by doing a simple Google search. There is a huge industry devoted exclusively to providing financial advice, and many online companies pay their bills simply by churning out investment tips and ideas, regardless of their quality. Sometimes, the writers don’t even know whether the idea they are promoting is good, or not. They’re just suggesting it because a website needs content!
Obviously, it’s important that investors not fall prey to such shoddy advice, and that they be able to separate the good ideas from the bad. One good idea that investors can trust is investing in precious metals. Commodities like gold, silver, and platinum have incredible track records, and have proven over time that they can deliver the returns investors are seeking. In a world full of half-baked investment advice, investing in precious metals is one securities tip that the common investor can count on.
A History of Performance
The best way to pick the good ideas from the bad ideas is to look at what has succeeded in the past. The most successful investment managers, like Warren Buffett and the legendary money managers at Vanguard Investments, rarely make their gains by investing in new or unproven companies. It’s true that some venture capitalists do specialize in speculative buying like that, but successful V.C.s are few and far between, and most have already made their fortunes. They can afford to lose some money.
For investors who are not in such a fortunate position, it’s important to choose securities that have done well historically, and are likely to hold value into the future. Stocks of companies like GE, Boeing, and General Mills are excellent examples. But there’s no investment more “proven” than investing in precious metals. Gold, silver, and other prestige substances have kept their value for hundreds (if not thousands) of years. Though their markets fluctuate, it is virtually guaranteed that they won’t lose much value over time. And when their prices do go down, they recover soon, and often set new highs. This makes them excellent vehicles both for preserving and growing wealth.
No portfolio should be one-dimensional. Investors shouldn’t focus solely on protecting the value of their assets, or exclusively on high-risk buys that promise big returns. Instead, they have to mix assets from a variety of risk classes. Too much risk exposes the buyer to the chance of huge losses that might wipe him out entirely. Too little risk puts him in a position will he’ll never capitalize on natural rises in the market, and might even see his net worth decline due to inflation.
While this may sound complicated or time intensive, investing in precious metals makes it easy. Certain precious metals, like gold and silver, are much safer investment vehicles and involve relatively little risk. On the other hand, platinum is a high-risk, high-reward investment that can produce big gains quickly. The informed precious metals investor can diversify his risk with ease, without even looking at other classes of assets.