Many investment analysts suggest that investing in gold and silver is one of the best ways to ensure your portfolio will be able to withstand any of the huge market fluctuations there have been recently. This strategy has shown its merit for the savvy investors that have taken it to heart and experienced gains during the recent financial collapse. However, for the investor who is considering investing in gold and silver, they should be sure to take the following tips into consideration. In doing so, they will enjoy sustained growth in their investments and secure the rest of their portfolio from falling prey to the whims of Wall Street.
Invest the Right Amount
In the past, if you asked a financial planner how much of your portfolio should consist of investment grade tangible commodities, the answer would be around five percent. However, things have changed drastically since then and we now know that the market is susceptible to extreme fluctuations. Investors must remember this and take it upon themselves to invest in enough commodities so that their overall position does not rise and fall with the market.
In today’s economy, good financial planners will suggest that your portfolio should be made up of a substantial portion of tangible precious metals. Between ten and twenty percent of your portfolio is the standard advice; however, conservative investors that are going into retirement should invest even more in precious metals. Investing in gold and silver provides the smart investor with an investment tool that has inherent worth.
When you are choosing the right metals for your investment strategy, it is always best to look toward gold first. Gold is the standard investment tool in the precious metals market and it has a solid reputation as a stable and consistent wealth-generating commodity. Additionally, it has many uses in the consumer electronics industry and is expected to enjoy even greater growth due to the demand for these goods.
Gold is used in everything from cellular telephones to flat screen televisions. Its superior conductivity, malleability, and resistance to corrosion make it the ideal metal for electrical components and their connections. In turn, many manufacturers are buying up gold in large amounts, and this has produced a spike in the demand that is driving up the price of the precious metal.
Silver is another precious metal that can be bought in investment grade coins or bullion. Silver has enjoyed a five-year growth cycle and is projected to increase in value into the future. Additionally, silver also has a very large market and investors who want to liquidate their supply of this precious metal will have no shortage of buyers.
Not only does silver serve as an effective investment tool, it is also backed up by its many uses. Silver is a key component in the automobile industry, and with the expected growth of this industry it is a safe bet that silver will continue to enjoy increased growth.