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Understand the advantages of investing in precious metals

Investing in Precious Metals is a great way to diversify your portfolio and protect yourself from economic downturns. But there are some things to keep in mind when you’re making a precious metals investment, including how much to allocate to the metals and whether or not to leverage your investment.

1. Say “no” to pushy salespeople

Often, when someone offers you a way to invest in gold, silver, or platinum, they will try to persuade you to make the investment right away or by implying that there is a limited amount of the precious metal available. This is a bad idea, as it can lead you to make an investment you later regret. Likewise, it’s important not to be pushed into making an investment without having a full understanding of the costs associated with the transaction.

2. Understand the risks of investing in precious metals

One of the biggest drawbacks of investing in precious metals is that they don’t pay dividends like stocks do. They are also difficult to store, and the IRS taxes them as collectibles at a higher rate than capital gains tax rates.

3. Understand the advantages of investing in precious metals

The first advantage of investing in precious metals is that they offer protection against inflation and economic recession. This is because they tend to hold their value over the long term, unlike other investments that can decline in price.

4. Consider investing in mining equities

Another way to invest in precious metals is by buying shares of companies that are engaged in the mining and production of these metals. These stocks typically rise when the prices of the underlying metals are high and fall when they depreciate.

5. Use leverage to profit from rising prices

Using a leveraged ETF or closed-end fund can be a good way to increase the amount of your precious metals exposure. However, you should be aware that these products can be very volatile and can be subject to a margin call if the market declines.

6. Invest in the right precious metals

To make the most of your precious metals investment, it’s crucial to understand the different types of precious metals and how they can help you grow your wealth. The most popular are gold, silver, and platinum, but there are many other options to consider.

7. Ensure your investments are properly diversified

Regardless of the type of investment you’re considering, it’s essential to make sure that it is diversified across all asset classes. This will protect your money from any sudden changes in the stock, bond, and real estate markets, as well as any unexpected economic downturns.

8. The importance of valuing your investment correctly

When you’re deciding how to value your precious metals, be sure to follow the same rules for gold as you would for silver or platinum. For example, pay attention to the current AISC of the metal per ounce and compare it with its historical inflation-adjusted price.

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