Is investing gold and silver a good idea?

It all depends on your position in the market and the state of your portfolio. This is a semi-predictable speculative asset that can make you earn real money. Buy gold if you invest for when times are bad, and consider a gold IRA investment for even greater diversification of your portfolio. Both gold and silver could be good portfolio diversifiers. Traditionally, gold has performed better because it is less tied to the direction of the economy due to its relatively low level of industrial applications.

Silver is a component of many industrial companies and is more closely linked to the direction of the economy. In general, gold is considered a diversifying investment. It is clear that, historically, gold has been an investment that can add a diversifying component to your portfolio, regardless of whether you are concerned about inflation, the fall of the US or US dollar, or even the protection of your assets. If your focus is simply diversification, gold is not correlated with stocks, bonds and real estate.

While silver can be volatile, the precious metal is also considered a safe asset, similar to gold, its sister metal. Safe assets can protect investors in times of uncertainty and, as tensions rise, they could be a good option for those seeking to preserve their wealth during difficult times. When evaluating the dividend yield of gold stocks, consider the company's performance over time with respect to dividends. In short, this law began to establish the idea that gold or gold coins were no longer needed to serve as money.

Another way to buy gold, silver and precious metals is to invest in the shares of the companies that extract them. That means that if you want to buy silver in the form of a coin to use as a currency, it will be easier to break than a gold coin because it has a lower value. There are other reasons why buying gold may be a good idea, but the main reason is usually to protect yourself against inflation and protect the value of your money over time. In some cases, some gold ETFs may be taxable as collectibles, meaning that profits can be taxed at a rate of 28% compared to the lower long-term capital gains rates that would generally apply to an ETF.

If we look at longer or shorter time frames, gold or the market in general will perform better, sometimes by a wide margin. So, when you decide to invest in gold thinking that you're going to be “one of the smartest” if the dollar collapses, you may have thrown your money down the toilet. If you think about the global obsession with gold, it's easy to get carried away by adventure and mystery, such as searching for gold during the Gold Rush, pirate ships and treasure maps. The pound sterling (symbolizing a pound of sterling silver), shillings and pence were based on the amount of gold (or silver) they represented.

Finally, if your primary interest is to use leverage to benefit from rising gold prices, the futures market may be your answer, but keep in mind that any holding based on leverage involves significant risk. And some people still do, but instead of burying gold ingots in their backyard, they buy stocks or mutual funds that invest in gold. . All I'm saying is that it makes sense for people to own at least 5% of their portfolio in gold and silver (in addition to other investments, such as stocks, etc.) Therefore, whenever there is news that points to some kind of global economic uncertainty, investors usually buy gold as a safe haven.