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Since the COVID-induced stock market collapse in March 2020, investors keep hearing the same thing: the inevitable crash or bubble burst is just beyond the horizon. While markets have maintained steady and even absurd returns (here’s looking at you, Tesla), the current rate of market growth can’t persist. So then, it becomes a matter of if, not when, the market will suffer a crash or at least a prolonged bear market.
Because of this inevitability, hedging against a market downturn or an increase in inflation isn’t just a smart move — it’s a necessity. And that’s why precious metals are an ideal addition to your portfolio. Furthermore, precious metals make a unique gift idea for the non-investing individual in your life.
Our team at London Coin Galleries of Newport Beach has helped individuals, collectors, gift givers, sellers and buyers of all things precious metals. Whether you want to buy, sell, trade, we’re the Orange County coin dealer of choice.
So, whether you want to diversify or you’re searching for a great holiday gift idea, precious metals are an amazing choice. Here’s why.
1. A Hedge Against Inflation
Some financial advisors and experts would argue that t-bonds, TIPS, and other government-issued securities are the best inflation hedges. But when you look at gold, silver, and other precious metals, they often offer protection that’s just as effective.
During inflation the value of the dollar decreases. However, the price of precious metals aren’t nearly as volatile. At periods of inflation, precious metals tend to maintain their value or even increase in value. As a result, you can trade in precious metals or get more value when you sell them, effectively negating inflation as a result.
2. Protecting Against Known and Unknown Risks
Historical trading charts and patterns can help you identify risk and perhaps predict a bit of the future. However, it’s hardly a crystal ball. Only time can tell what happens to domestic and foreign markets, whether it’s the result of politics, civil unrest, or unique events like the COVID pandemic.
That said, precious metals have shown a notoriously low correlation compared to other assets. That means that if the market has a downturn or other securities suddenly experience a rug pull, precious metals will hold their values or even increase in value.
You can’t predict the future, and that’s just what precious metals aim to do: mitigate risk in a world of unknowns.
3. A Unique Present
How many kids — and even adults — want presents that end up in the trash or immediately depreciate? Probably a vast majority of them.
But that doesn’t mean you have to follow suit. If you’re searching for a unique gift idea, precious metals are the way to go. That doesn’t mean you’re going to give your nephew a hunk of silver; instead, opt for a one-of-a-kind coin.
The U.S. Mint offers dozens of unique coins with a variety of designs, shapes, and sizes for a variety of prices. You can also visit a reputable coin dealer to see what inventory they carry or what they recommend. By doing a bit of shopping, you can get a gift that keeps on giving (or at least gives them a little extra cash for the future).
In a bull market, precious metals may not make the best investment, but with a lower price than other securities, it’s a great gift to yourself or others. Just make sure to visit a legitimate shop or vendor to get the right price on your purchase. Because who likes to overpay during the holidays? No one. We at London Coin Galleries of Newport Beach are your Orange County precious metals dealer of choice, give us a call to book an appointment.