The recent pandemic sweeping across the world, causing economies to fall into recession and stock markets to weaken, have reminded many investors of the financial crisis of 2008. Investors learned then how quickly the value of a stock can drop and how quickly the precious metals market can rebound during a recovery.
During the financial crisis of 2008, investors lost more than 50% of the value of their stocks. Unfortunately, the economy is in a crisis again. Today, many investors fear that the new financial crisis will be even worse than the previous one because of the enduring nature of the pandemic.
Despite the distribution of vaccinations and the rollout of the Biden Administration’s Build Back Better Plan, the economy is still in crisis. While things may be moving in the right direction, it may take some time for the economy to recover. It will take some time for enough people to get vaccinated to stop the pandemic. It will also take some time for enough people to get back to work for businesses to return to normal.
Returning to the precious markets once again may be a smart move. It could be a way to safeguard any gains made in the bullish stock market before 2016. After the financial crisis in 2008, when the economy was recovering, the precious metals market, particularly the value of gold and silver, soared to new heights.
Interestingly enough, the precious metals market in 2021 may be even more promising now than that of the market after 2008. Investors now have far more options on how to invest.
Benefits of Precious Metals
Precious metals are valuable because they are rare. These metals mined from the earth are not only used in jewelry and minted into coins, but also serve industrial purposes. Both investors and industrialists prize precious metals.
While gold, silver, and platinum are the best known, there are numerous other kinds of precious metals, such as palladium, rhodium, ruthenium, osmium, and iridium.
The Top 5
If you are looking for precious metals to invest in for your IRA, the top four to consider are gold, silver, platinum, and palladium. Rhodium, the fifth precious metal, may not be a good investment choice for reasons that we will discuss.
Let’s take a closer look at what precious metals make excellent investments, why they are worth investing in, and how to use them to diversify your portfolio.
Stories about gold have enthralled human beings for centuries. Gold represents wealth. It’s often considered a symbol of abundance. And from a pragmatic point of view, gold is a metal that always stores its value.
The value of gold is legendary. Consider, for instance, that the time-honored Olympic Games honor the greatest athletes in the world with gold medals.
Gold has a fascinating history:
Lydia, now part of Turkey, introduced the idea of gold currency in 600 B.C. Centuries later, when banknotes were introduced worldwide, gold was tied to the value of a currency.
Pegging the value of a note to gold was called the gold standard, a phrase from the Gold Standard Act established in 1900.
After President Nixon abandoned the gold standard in 1971, the difference in value between banknotes and the metal has increased exponentially. Today, for instance, a $5 U.S. Liberty is worth $625 while a $20 U.S. Liberty Gold Coin is worth $2,132.95.
Investing in gold isn’t simply a way of finding a source of stability against the existing value of a currency. It’s also far more than simply a means of diversifying your investment portfolio.
Since 1971, gold has offered investors annualized gains, gains even higher than the Dow Jones Industrial Average and the S&P 500. Since the start of this new century, it has doubled the average annualized gains of the stock market, and it tripled in value after the financial crisis in 2008.
Savvy investors consider gold the antidote to a weak stock market. They see it as the solution to an economic crisis slipping into a recession. Investors see gold as a reliable way to protect their wealth.
If you get a gold IRA, it will offer you the same tax shelter benefits as an IRA, 401 (k), or 403 (b), or other similar kinds of retirement accounts. Gold coins or bars in a gold IRA account will receive additional protection.
In sum, gold is a powerful way to appreciate your wealth.
Silver may not be as popular as gold, but you should not underestimate it. In a bullish market, it can rise in value faster than gold. An example of this occurred in the 2008 crisis. While gold did exceptionally well, its price tripling, the price of silver quadrupled.
Silver has a different price than gold because it has different properties and serves a different purpose in the marketplace.
Like gold, silver is valued for its aesthetic appeal. But unlike gold, silver is frequently used in manufacturing industries.
Silver is heavily used in diverse industries. It plays a role in the development of dental equipment. It’s used in making electronic parts. And it’s being used in making solar panels.
One reason silver is popular among investors is that demand exceeds supply. Often the supply of silver simply cannot keep up with the demand for it.
Since silver is rarely found by itself but usually found as a byproduct of other metals like gold or copper, supply fluctuates. Since silver mines are extremely rare, when gold or copper mines close, the supply of silver falls, too.
Analysts anticipate that the current economic tension between high demand and low supply will soon result in a breakout in the price of silver. At present, silver is a good investment because of how much it is undervalued.
Investors can open up a silver IRA for a tax-sheltered retirement account.
If gold is the most popular precious metal, silver comes in second, and platinum, third.
Unlike gold, which was popular during the emergence of civilization, platinum is a relative newcomer. Metallurgists only learned to separate platinum from other metals in mines in the 18th century. Consequently, platinum only became popular in the Age of the Enlightenment.
Once platinum’s unique properties were discovered, such as durability and corrosion resistance, many industries quickly adopted it. It has become widely used by jewelers.
Although platinum is also minted into bars and coins, it’s not produced as much as gold and silver bullion.
Additionally, platinum is used in the watchmaking industry, electronic industry, and automotive industry.
For many years, the automobile industry was the primary buyer of this precious metal, finding it the best material for catalytic converters.
But, in recent years, the price of platinum has fallen. This is because the automotive industry has turned to palladium as their metal of choice when making catalytic converters. Palladium was cheaper and had similar properties of durability and corrosion resistance.
Currently, South Africa produces more than 80% of the platinum in the world.
Platinum is now at an all-time low price. This makes it a solid precious metal to buy now to store. If there is a disruption in supply, the demand for it will rise again. When that occurs, the price will soar.
Palladium was also only discovered in the 19th century. It shares has many things in common with platinum. Like platinum, it has the metallic properties of durability and corrosion resistance. Like platinum, it’s primarily used by the automotive industry to make catalytic converters.
Palladium is only found in a few countries. It’s produced in large amounts by Russia and South Africa and only in small quantities in the United States and Canada.
Palladium can become expensive. This occurred in early 2000, when the supply from Russia fell, causing the price to rise to $1,300 an ounce.
Fortunately for automakers, the price dropped to a few hundred dollars per ounce by 2008. Since it is like platinum but lower in price, automakers used it to make catalytic converters.
This strategy worked until early 2020. Because of new supply disruptions, the price of palladium rose recently, occasionally going as high as $2,500 an ounce. Since then, the price has dropped to below $2,000 an ounce. Currently, palladium is more expensive than gold.
Automakers are not switching back to platinum because it is costly to redesign catalytic converters back to platinum. So, for now, despite supply disruptions from both South Africa and Russia, automakers are staying with palladium, hoping the price will average at a lower rate over time.
Rhodium is classified as a precious metal because it’s rare. It is not valued for its aesthetic properties like gold and silver, but it is prized for its industrial properties, with properties similar to platinum and palladium.
Like platinum, this metal is used to make catalytic converters, and 80% comes from South Africa.
But unlike gold, silver, platinum, and palladium, rhodium is not a good choice for an IRA because of its extraordinary volatility. Its price is not stable enough to be useful for long-term investments. For example, in 2016, it was trading for $625 an ounce, then it rose to $14,000 in March before settling down to $8,000.
Additionally, unlike gold, silver, and platinum, rhodium isn’t minted into coins or bars. This makes storing it a challenge.
Only a small group of high-risk investors are interested in rhodium. These speculators hope to make a significant profit. Of course, they risk heavy losses, too.
What Should You Invest In?
If you are investing in a precious metal IRA, the best metal to invest in is gold. Gold has a better risk to reward ratio than the other precious metals. It also has a long track record of stable prices.
If you feel you can afford to take more risk, then silver looks promising, too. At present, it is undervalued. This means that it could have a high potential upside.
If you want to diversify your portfolio, you may want to add a small percentage of platinum and palladium.
As for rhodium, it’s best to stay clear of investing in this precious metal unless you know what you’re doing and consider yourself a high-risk investor.
There are hundreds of precious metal companies out there to consider investing with. The following three are the best that we have found.
Each one has hundreds of positive reviews from customers within the last year alone. Goldco, the #1 option, has thousands of five star reviews!
With such an excellent reputation, you can't go wrong by simply requesting a free gold investing guide. You can do so by clicking here or "Visit Site" below.
How To Begin?
There are over a hundred companies out there who help investors with precious metals. We've done extensive research and reviewed most of them.
We took into account their overall reputation from customers (which is our highest weighted factor since customer reviews really matter), company history, management, customer service, fees, and much more.
This helped us narrow down to the top 3 below. Each of these companies have over a hundred 5 star reviews and Goldco, the #1 choice, has over 1000 by itself!
You can request a free precious metal investment guide by clicking "visit site" below.
Please note: For a limited time, Goldco is offering $10,000 in free silver when you open a qualified gold IRA.
To find find out more about their 10K silver offer, click right here. We aren't exactly sure how long it will last so it's worth checking out right away.