The Dow, the S&P 500, and the Nasdaq have consistently reached new heights since the Great Recession. With such growth, the opportunity to invest in stocks and ETFs have reached a vast array of both institutional and retail and investors. But the question remains: when will the bubble burst? As a result, investors need to hedge against downturns in the stock market. And perhaps no better way exists than an investment in precious metals. With protection against inflation and market fluctuations, precious metals offer a unique opportunity to buy, selli, or trade valuable commodities.
When to Buy Precious Metals
Buying precious metals often goes hand in hand with a bear market, which is typically a 20% decline in the stock market. Historically when prices go down, precious metals tend to have an inverse in value—culminating in hefty prices that an investor can use to gain wealth or enhance their portfolio.
The most important decision in this regard is not why you should invest, but rather when to buy. While no person can predict a bear market, certain signs can signal a market downturn, including:
- Sluggish economic growth
- Tightening of credit
- Falling corporate earnings
- The underperformance of blue-chip stocks
If you notice these during your research, chances are that it’s time to invest in precious metals. By doing so, you can hedge against lower prices while also having a liquid asset that you can convert to cash quickly and easily.
When to Trade Precious Metals
Trading precious metals — whether exchanging gold for silver or day trading the commodity — can prove profitable in both short-term and long-term scenarios. In terms of day trading, you’ll need to have the time to watch fluctuations in price. For many working adults, this isn’t a possibility. But if you have the time, patience, and knowledge, trading precious metals can be a solid idea for main or extra income.
If you want to exchange metals, the idea is to keep an eye on both the value of metals and the industrial uses of each. Platinum, gold, palladium, and silver are all used in different products. When the products become more popular or hit a boom, buying that particular precious metal may result in a quick increase in price. When the demand dies down, investors must remain diligent to buy or sell at the right time.
When to Sell Precious Metals
Deciding when to sell precious metals is a difficult choice. Many aspects factor into this decision. This includes not only wealth and financial decision but also personal reasons. When you need cash quickly for an emergency and your only liquid asset is precious metals, the choice revolves around where you can get fair value rather than if you should sell. In this case, you need to find a reputable dealer that gives you a decent return on your investment.
In instances of a bull market, you may want to consider selling precious metals or precious metal ETFs, simply because the return is far higher with stocks or mutual funds. Keep in mind that you may not want to liquidate your entire inventory. But selling for a bit of money to play with can work out in your favor.
Whether you decide to buy, trade, or sell precious metals, the most important facet is going with a reputable dealer. At London Coin Galleries of Newport Beach, we understand the numismatic value on top of the market rate of metals.
So rather than conduct transactions with brokers, individuals, or pawn shops, make the safe bet and get the best value possible, due to high demand, some precious metals may not be available or on backorder due to the current covid-19 pandemic. Just the same, there may be a minimum purchase requirement on particular precious metals due to the trickle-down effect from mints.
At this time, we are conducting business by appointment only, so please contact us with any questions you may have prior to arriving. Whether you have one coin or an entire estate coin collection, we’re glad to help you where we can. Call us to book an appointment.