Precious Metals vs. Stocks – Which one will you choose?

In Uncertainty – Choose the Right Investment

In these uncertain times, your retirement plan may go belly up if the ailing government has anything to say about it. You may already be feeling the crunch as inflation, falling market rates and uncertain employment rates set in making it next to impossible to save for those ‘golden’ years. This is why investing in precious metals is considered to be the longest lasting commodity for many middle aged and nearly retiring individuals (click here for more information). Compared to stocks, they have proven to be greater in value due to the following reasons:

Longevity

Even though investing in precious metals (such as gold coins for 401k/IRA) is not subject to trends in the market, it cannot be affected by economic factors. In fact, most professional investors suggest that any long-term investment goal should encapsulate 10% of gold and silver investments (such as gold bullion, gold coins, rare gold, silver bars, silver ignots)  in as many mediums as possible for a wholesome and long lasting tenure.

Stocks, on the other hand, are not considered reliable in this regard. Since they are classified as ‘equities’, the stockholder actually owns a part of the company that introduces one in the first place. (Precious metals are ‘commodities’, which means that if you own some, you are actually the owner of a particular physical product). They can only make money if that stock experiences an increase in profits or if their business expands. Investors interested in precious metals benefit when their demand increases since their spot price rises as a result irrespective of market trends.

Profit Margins

Besides this, the profit you make will be entirely dependent on the kind of stocks you invest in. You might even have to wait a while before you can resell them. Plus, selling your stocks even when they are at an all time high might prove disastrous, while letting them go when there is no demand for them might be a wise decision.

This kind of uncertainty is visibly absent in precious metals which are basically ALWAYS in high demand even if their costs aren’t all that high. The reason for their unmitigated popularity lies in their scarcity which is especially true for platinum and gold. However, prime profits can only be achieved if you find buyers (who are always available for this sort of investment) who are willing to pay well for them.

Values

Stocks also have an unfortunate tendency of losing their value completely if the company that offered them goes bankrupt. On the other hand, since precious metals don’t belong to a particular entity or enterprise, they rarely if ever lose their value. Take gold for instance. If you plan on setting up a 401k gold investment or an IRA gold investment plan, you can rest easy because unless interest drops radically that demand falls for it, you WILL be able to profit even if you decide to sell it early. Plus, even if stocks fall considerably, the value of gold, silver and platinum either remains stable or spikes significantly simply because the people across the globe rely on them during such economic downturns.


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