Precious Metals Assets: Safe-Haven Investments
Whenever there are stormy clouds are seen over the economic horizon, investors camper to find alternatives that would hedge against economic risks. Gold, as well as silver, are considered a part of the safe-haven investments which include government bonds, wealth preservation funds, and infrastructure or properties as well. Gold is a “standard safe-haven investment” and can form a part of the portfolio that would have many other assets in it besides gold.
Many investors keep the share of gold to be about 5-15% of their investment portfolio. Investors try to hold assets for rough economic times that do not have a direct bearing with equity stocks and both Gold and Solver are attractive from this point of view.
Precious Metals and Interest Rates
Gold and silver do not have yields or interest rates. They are assets that are sold at a price the buyer would be ready to pay at the time of purchase. While silver a bit more volatile, the price of gold is relatively less so. Physical Gold ETFs and physical Silver ETFs are good ways to safely invest and can be bought and sold. Gold bullion and Silver bullion bars and coins are also attractive ways of investing. Keeping gold and silver physically at home, storing it in a bank depository or IRS-affiliated institution (in the case of gold for retirement accounts) are the standard ways of investing in gold and silver.
There are many other safe-haven investments but as described earlier, gold is the standard one. Gold is indeed a rare and precious metal and only 165,000 tons of it exists in the world. The US government had continued with gold as legal tender all the way to 1971.Whenever uncertainty rises or at least it is perceived to rise, the stock markets tend to reflect the sentiment and safe-haven investments like investment in Gold increases.
Global events that can affect economies of a region star affecting the entire globe due to the interconnectivity of various regional economies with the global economy and as such safe-haven investment tends to rise in such situations. Some investors invest in currencies like Swiss Francs as a safe-haven investment as the currency has remained strong for a long time. However, recently there have been some restrictions on Swiss Franc accounts and thus investors might shy away from it. Others prefer precious metals or T-bills. Perhaps it is the best not to put your eggs I one basket and broaden one’s portfolio.
Some investors even tried bitcoin as a safe-haven investment, however, it is a bit too volatile and thus investors get jittery. These days, some advisors recommend the Polish, Israeli or Singapore currencies. Some others would recommend agricultural land. Some advice you to just holds on to cash. Others would recommend that investors can invest a bit in each of the above. Thus, there are lots of choices when it comes to safe-haven investments. Perhaps it is better to go along with the advice of those who recommend a diverse portfolio with your investment spread over a wide safe-haven portfolio.