In 2020, markets are as unpredictable as ever. From a major crash in March due to the COVID pandemic to record growth in the months following, retail and individual investors are met with complete uncertainty about the future. To exacerbate the problem, a polarizing presidential election, a race to a vaccine, and emerging technologies are creating more volatility. And all of this combines into difficulty when it comes to selecting the right investments for your portfolio.
That’s why many investors are considering precious metal investments in coin or bullion. With solid intrinsic and long-term investment values, coin and bullion are an amazing way to diversify or boost your portfolio in times of uncertainty.
Difference Between Coins and Bullion
One of the most common concerns that many new investors have is the difference between coins and bullion. While both are made of precious metal, bullion is purely an investment in metal. Confusingly, bullion can also come in coin format. However, these are often minted as an investment and not as a collectible like certain types of coins. Moreover, bullion can also come in bars, rounds, irregular shapes, and more. The idea is that investors are getting a physical piece of precious metal.
Coins, on the other hand, have an added numismatic value. This refers to the historical or collectible value that’s built into the price of the coin. The rarer the coin is, the greater the price. In some cases, these coins are also made of precious metals, but they don’t have to be. Therefore, due diligence and research is vital to selecting a coin, especially if you’re looking to purchase a coin made of precious metals.
London Coin Galleries of Newport Beach has worked with collectors and investors alike. We are your Orange County coin and bullion dealer of choice. Whether you want to buy, sell or trade, you can rely on our experience to get the highest value possible.
Types of Precious Metals for Investment
Once you choose which type of investment is a better option for your portfolio, the next step is to select a metal. Each has their advantages, so here’s a quick breakdown to help you make the right decision.
Gold is the oldest form of currencies in the world. It’s highly liquid and selling it in a pinch is nearly as good as having money in your pocket. In addition to intrinsic value, gold also has numerous other applications that make it a valuable component in jewelry, electronics, and even dentistry. Thus, gold tends to hold value over time, even if it dips momentarily due to volatility. Gold is also a preferred investment during times of inflation.
Silver is another popular metal for investors. But unlike gold, this precious metal is equally as valued for its industrial and commercial applications. Very simply, the more silver is in demand in the industrial sector, the more its value spikes.
Platinum is a rare metal that has many practical industrial applications, such as part of a catalytic converter in automobiles in past decades. Historically, it fetches a higher price than gold, simply because of its rarity. But in 2020, the price fell from $1,016 per troy ounce to $600 per troy ounce in just one month. This was a product of uncertainty, as many investors wanted to convert their precious metals to cash. Today, the metal price remains highly volatile, but low prices may lead to investment opportunities.
Palladium is yet another precious metal that’s used in electronics and industrial products. When mixed with gold, it creates a stronger alloy, which is highly sought after in the jewelry industry. However, the true value of palladium is most visible in the automotive industry, as it replaced platinum in catalytic converters in the 2010s. As a result, palladium may see a rise in value compared to platinum.
Regardless of which precious metal you choose to add to your portfolio, remember that it’s all about balance. Like the old saying “Don’t put all your eggs in one basket!”. Don’t put all your money into a single investment and diversify whenever possible. With any luck, you’ll have a nice mix of precious metals, stocks, and other investments that translates to wealth.
Whether you’re an avid investor or simply starting out, we’re here to help. Contact us to book an appointment. Although we have a gallery, we prefer to schedule an appointment in order to spend the ample time required with each customer we see. Call us to schedule an appointment today.