Some Of The Pros & Cons Of Investing In Physical Precious Metals

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With every type of financial investment that you can make, there are pros and cons, and it is the same when looking to invest in physical precious metals. It is an excellent idea to add these to your portfolio and diversify it, but you will need to do plenty of careful consideration before jumping in with both feet.

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Below are some of the factors you will need to consider when you want to invest in physical precious metals to ensure it is the correct choice for you and there are no nasty surprises.

Pro: A Tangible Asset

When you invest in physical precious metals, it is a tangible asset that you can hold in your hands, rather than a certificate or piece of paper. The metal will always have a value, while ETFs and other paper investments of precious metals can be worthless if the markets crash. If you ever need some quick cash, you can also liquidate your assets quickly by selling some of your gold to scrap gold buyers or other precious metal dealers. 

Con: There Is A Cost For Storing It

One con of having precious metals in your investment portfolio is that there is a cost to storing it. You will want to safeguard your investment so you will need to get a safety deposit box, a safe in your home, or pay a precious metal dealer to store your assets for you. 

Pro: They Store Value

Many investors say that stocks and shares outperform precious metals, making them a better investment but this is not always true. If you look at the markets over the last 15 years, gold and other precious metals have outperformed stocks and shares significantly. Although many people consider them as a defensive investment and a hedge against inflation, depending on the price you get when you invest, you can make a decent return on it. City Gold Bullion is among the Brisbane bullion dealers you could visit for a good price and a safe way to invest in gold. If you are located outside Australia, you can check reputable dealers near you through Google search.

Con: There Is No Interest On Your Investment

A con of investing in precious metals is that you will not receive interest on your investment as you do with other investment vehicles. However, you can still make a profit if you invest wisely and at the correct time. As the metals store value, it is not always a problem, and it depends on the reasons for your investment whether owning physical precious metals is a good option for you or not.

Pro: No Special Knowledge Is Required

Investing in precious metals is something that anyone can do without any special knowledge and still make a return, unlike investing in stocks and shares. However, it is best to do plenty of research before making any significant investment, no matter what type of investment vehicle you are looking at for your portfolio.

Con: You Can Pay Tax When Liquidating Your Assets

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One drawback with investing in physical gold and other precious metals is that you can be taxed when you sell them and liquidate your assets. If your investment is more valuable than when you bought it, you may need to pay capital gains tax on it.