Precious metals have consistently shown throughout history they’ve been highly valued for their rarity and durability. Gold, silver, and platinum, along with other precious metals, have long been used as a store of value. They can also be used to preserve and create wealth over time.
Long-term investors can hold precious metals to protect against inflation, diversify their portfolios to reduce downside risk, and limit volatility. Precious metals are a reliable store of value during a time when elevated inflation is chipping away at the value of the dollar.
Let’s look at three different ways that these metals should be part of your financial plan.
3 Ways Precious Metals Help Protect Wealth
1. Investment
One of the main ways precious metals can help protect investor wealth is by simply investing it in. Investors who purchase precious metals can hedge against multiple risks because this asset maintains its value over time and is not subject to the same market fluctuations as other conventional assets like stocks and bonds.
By investing in precious metals, you can preserve the value of your money. This is important because prices in the economy tend to increase year-over-year, also known as inflation. Inflation has become a harsh reality that consumers all over the globe have had to deal with. If it’s not addressed, the value of your money can decline. That’s why it’s important to invest in a durable asset like a precious metal which can address inflation worries.
2. Safe haven asset
During times of economic uncertainty, investors tend to hold precious metals like gold as a safe haven asset. According to its historical data, gold has held its value during periods of economic volatility.
For example, as a finite resource, gold’s value can change over time. The gold price tends to rise when supply falls and demand increases. On the flip side, if there was less demand for the yellow metal and more supply, then its market value could decrease.
3. Diversification
Precious metals can also be used to diversify your investment portfolio. By investing in precious metals, investors can spread their risk across different asset classes, reducing their overall portfolio volatility. This diversification can help protect investor wealth in the event of a market downturn or economic crisis.
Here are the top precious metals you can invest in to protect the value of your wealth over time.
