While experts recommend having 15% to 20% of your portfolio in precious metals, the reasons to invest in metals don’t stop there. Below are three top reasons why most investors choose to diversify their portfolios with precious metals.
Precious metals have historically been a solid hedge against a declining U.S. dollar
Metals such as gold, silver and platinum, are held and traded throughout the world. Their true value (that is, their purchasing power) is not solely or directly dependent on the falling fortunes of the U.S. Dollar. Precious metals, therefore, have at time been a good protection against a falling U.S. Dollar. One example would be during 2003 and 2004, as the value of the U.S. Dollar declined, gold and silver prices and the value of precious metals expressed in dollars increased.
Precious metals at times can be a safe-haven investment in times of war, political strife and uncertainty
Whenever and wherever tension or hostilities break out, people everywhere quite naturally gravitate toward the assets they trust most. And today, even in our high-tech-driven 21st century, millions of investors still rely on gold and silver in times of trouble is.
Precious metals could offer outstanding price appreciation and profit potential
There have been some periods of significant price volatility in the precious metals markets where prices have moved suddenly and dramatically, both higher and lower. In these conditions, precious metals could produce impressive short-term investment returns. And many financial experts have predicted and continue to forecast volatile gold, silver, platinum and palladium prices in the months and years ahead.