The world of investment never stops, despite the volatility or episodes that can harm our assets gold ira companies. And while many dare with the stock market or bonds, others seek classic refuges such as gold or other metals.
You have to know how to distinguish, first of all, between precious and industrial metals. The first of all tend to act as assets with which to protect themselves against episodes as black as recessions. “Precious metals, such as gold, silver or platinum, are always used to hedge in periods of economic crisis, but it is also interesting to invest in them in other stages”, highlights José Luis Herrera, an independent analyst.
“They can serve as an effective instrument to reduce your level of risk and volatility, as they have almost no correlation with other trading assets,” says the analyst. “ In times of political instability, as in the case of Brexit uncertainty, or extreme financial turmoil in Venezuela and Zimbabwe, assets like gold or silver can protect our money ”, he adds.
For their part, industrial metals, such as copper, iron ore or zinc, may have a positive behavior in the markets depending on many other macro and particular factors. “From the monetary policies of the central banks, to the production of these resources in the countries, to the situation in terms of exports and imports,” They do not qualify as a haven asset as such.
Once we have on the board what these two classes of metals consist of, many investors or future operators ask themselves how they can invest in these assets: what alternatives are there and which ones may be the most recommended. Of course, it must always be considered that this type of investment does not guarantee any return and that they are subject to constant changes due to market prices.
The physical purchase, in the case of precious metals
Indeed, not all metals are the same. In the case of precious metals, one of the possibilities is the physical purchase of ingots: “This is valid for gold, silver, platinum or palladium.
How can it be done? It is necessary to resort to companies that are specialized in making transactions with bullion, coins or jewelry. “Above all, in the field of investors, it is necessary to know that the company is legally registered, with all the guarantees, and that they have the lowest possible commissions,.
In the case of ingots, three fundamental factors must be taken into account: The purity of the ingot, which must be 99.9% when possible; that has an international certificate in the metal; and that they issue a purchase invoice for possible claims that we may make in the future, together with the purchase certificate.
Invest through investment funds
There are some categories of investment funds that are exclusively dedicated to investing in metals: both precious and industrial. It is a good option from the point of view of investment.
Some of them are geared towards gold assets, while other products focus on more commodities. “The normal thing is that these vehicles focus on mining companies, producers and a long etcetera”, says Cárpatos. An example can be seen in investment vehicles such as Schroder ISF Global Gold or the Franklin Gold & Precious Metals Fund. To do this, all you need is to have an investment account in your own bank or in an online broker.
For those who are less savvy who want to deposit their money in metals, the possibility of funds is an option to consider. Of course, it is convenient to read the product brochure well to see how it is positioned and the commissions that are going to be applied to us as clients.
Opt for other alternatives such as futures or ETFs
Among the most advanced products through which you can invest in metals of all kinds are futures contracts, contracts for differences (CFDs) and investments through ETFs. All directly invest these raw materials.
To access this type of product you need to have an account with an online broker. “There are many possibilities in the market and you have to focus on the range of products and the commissions that apply,” says Herrera. The nuance that experts focus on is that they are recommended options for more experienced investors.
For its part, CFDs carry a class of risks that only a professional trader or investor is capable of handling: “They have to do with the multiplication of values and the leverage in which it operates, because the capital that we have used can end up disappearing.
Finally, the ETF alternative is a good possibility. This vehicle is an investment fund that is listed on the markets and that generally replicates a series of assets or indices. “In the case of gold, for example, companies linked to the precious metal”. This type of product can also be purchased through the bank or an online broker.