Precious Metal Investment: 101 Mini-Guide for Beginners

Precious Metal InvestmentIf you want to start a precious metal investment, there are some things that you should know as a beginner to avoid many common and costly mistakes. First, you need to understand how precious metals bullion is weighed. Most commodities and other products use a typical ounce, but with gold bullion and other precious metals a Troy ounce and a Troy pound are used instead. This is an important difference, because a troy ounce weighs 31.1 grams while a regular ounce weighs just 28 grams.

Another important factor for beginners concerning a precious metal investment is all of the options available. Investing in precious metals can be done several different ways, and you can essentially choose three main options: physical bullion such as coins and bars, equities of mining companies and various exchange traded funds. Each of these options has its own set of benefits or drawbacks depending on your investment goals. You are not limited to buying and selling gold or platinum bullion, there are many choices and some do not require you to take possession of any bullion at all. This is true with a silver or palladium bullion investment as well. Learn all of your investment options before you choose the ones that are right in your situation.

If you want a precious metal investment, compare sellers and markups before you buy any bullion. Only use a dealer or seller that has a great reputation and that has a solid history in this industry, The high prices of gold and other precious metals have led to a big increase in gold and silver investing, and an increase in scams and frauds in this industry as well. No matter what type of precious metal investment you eventually decide on, do your homework and you will minimize your risks and prevent large losses sue to common beginner mistakes.

Investment in precious metal commodities is not just a short term investment, most of the times it will require more long term portfolio holdings so it can provide your capital with a safe haven against inflation. And just like with any investment make sure you invest no more than 10-15% in this particular type of market.