In which metal is it better to invest money?
Nowadays, many users are interested in the questions of whether it is profitable to invest in silver, whether it is profitable to invest in gold, how to save their savings? In this article, we will try to debunk the stereotypes that have stuck in the minds of modern society regarding the question of which metal is more profitable to buy.
Many investors believe that investing money in precious metals is a reliable way to save capital when the national currency devalues. This statement is not entirely true. Of course, precious metals will always be in price, even if there is a global economic crisis in the “yard”. However, if we consider investing in metals in the short term, not exceeding 12 months, then such deposits are unlikely to bring income, most likely they will be losses.
If you compare precious metals with securities, cash, they have their own value. This means that your investments will be fully protected, because the cost of metals will never fall to zero. In conditions of instability, the cost of metal increases along with demand.
On the other hand, it is difficult to predict the profitability of precious metals, even analysts are not able to cope with this task. This is due to the fact that the pressure is exerted by the demand environment, in addition, it is difficult to take into account all the prerequisites that can change the quotes of world markets.
Is it profitable to invest in silver or gold?
The value of the precious metal can experience strong fluctuations almost every day. If you look back, there were times when their average quote for the year significantly decreased. For example, in 2012-2015, the value of silver fell by 2 times, then went up again. Can I invest in gold? Of course, long-term investments in metals have a growth rate that is higher than inflation. This means that you will actually be able to save your savings.
Thus, investing money in silver or another metal will help to save savings, if the investment period will be at least 10 years. In all other cases, you will not increase the available capital, but rather lose some of it.
There is also an opinion that it is necessary to buy precious metals at the moment when they start to become cheaper, because after the fall in prices, there will definitely come a period when they will start to become more expensive. Moreover, you need to spend all the money on this event.
Don’t ever do that. Experienced financiers do not recommend investing in precious metals an amount that exceeds 10% of the investor’s portfolio. In more understandable terms, you should not keep all the eggs in one basket, and it does not matter what they will be made of gold or silver. In addition, you need to indicate expectations from investing in metals. You will have to make a choice between quick earnings and saving your savings.
How to actually invest in gold or silver?
If you need a quick result, then listen to the universal recommendation of financiers, which definitely gives results. Buy assets when their value starts to rise after a decline, and sell when the price starts to fall. To get a positive effect from such actions, you need to constantly be aware of the state of the market.
In many situations, you will have to act contrary to your own considerations. If, after purchasing a metal, its value continues to grow, many users will want to record this result. What does it mean? For example, if you purchased a precious metal worth 1,100 euros and its price started to rise and reached the level of 1,300 euros, it is natural that you will instinctively end the transaction at this level, and the price will not stop and will increase by another 500 euros.
How to invest in gold?
For example, you purchased a gold bar at one price, then it began to fall. You sit and wait for it to start moving up. It is often very difficult to sell psychologically with losses, but one thing to remember here is that you can lose even more.
You don’t need to buy and sell very often.Please note that you will be charged a commission for each action. If you do this, the commission will take most of the profit. Therefore, set a clear framework for yourself in advance, where the wait should end when checking the trend.
If you do not have enough experience playing on the stock exchange, then it is better to give preference to long-term investments, so you will certainly be able to earn money. How to invest in precious metals? A win-win option will be if you allocate a small part of your own capital for the purchase of precious metals, without looking at their quotes. For example, you can do this every 15 days. After a while, this tactic will fully justify itself, because the growth in the cost of metals will always outstrip inflation.
Many investors, based on their own experience, give advice “to buy only the most expensive metals, because they will have higher earnings.” This statement does not work in all situations. To be exact, it all depends on the economic development of the country, changes in the cost of metal and your financial plan.
What metals should I invest in?
These can be traditional options and palladium, as well as platinum. The most popular, of course, is gold. This metal is held in reserve by state-owned banks. Why gold? Historically, the yellow metal is the most common way to accumulate wealth.
It is followed by silver, which has an affordable price. It can also take the form of an ingot or coins. With the advent of the crisis and economic downturn, the value of silver rises. Traditional precious metals are the insurance of savings in times of instability.
Platinum and palladium have only recently appeared on the market, and have not yet received general recognition from market participants. In simpler terms, they don’t see them as a way to save money. To a greater extent, they are of interest to industrialists, and their demand and price are influenced by the development of the economy.
Changes in platinum and palladium prices are determined by industrial aspects, such as production volumes, factory consumption, and auto demand. All these factors are not related to the world of finance, so it is very difficult to anticipate their changes in one direction or another.
Which metal is better to invest in? If you need to “place” small savings, then we advise you to choose a cheaper option. Why? It is very expensive to buy a kilogram of gold, but things are a little easier with silver, you can buy several kilograms at once.
For short-term deposits, it is better to choose a more volatile metal that experiences strong price fluctuations. As reality shows, silver has a large amplitude of changes, unlike gold. Hence the conclusion that on silver you can not only earn more, but also lose.
You can see how the value of precious metals changes on the website of the central bank of Russia. Every day, the regulator sets the accounting value of precious metals, this indicator is then used by second-tier banks. Each commercial bank offers its own terms of transactions with precious metals. Before you buy a precious metal, compare the offers of banks and choose the most profitable one among them.
How to decide which metal to invest in without having any experience?
To make the right decision, study not only the possibilities of a quick sale, but also the probability of losses. If you are going to buy back a precious metal, then be prepared for the bank’s commission, which reaches up to 30%. If you are investing for several decades, then it is better to choose traditional options for this purpose. As a rule, these precious metals have more liquidity than platinum and palladium.
If you think that only the rich can afford to invest in precious metals, then you are very much mistaken. You don’t have to be rich to invest in gold. Anyone can invest in gold this year. You just need to choose an option that suits your budget.
Only financial institutions — banks-sell a 999.9 gold bar. The disadvantage of this method is that gold buyers are required to pay VAT separately (20%). There will be no VAT refund during the implementation process. In other words, these are your expenses. If the bullion is sold before the expiration of 3 years, from the date of purchase, then you will need to fill out and submit tax reports, as well as make payment of income tax. If you keep the gold bar for more than 3 years and decide to sell it, you don’t need to pay income tax.
If you are afraid to leave gold at home and are thinking about renting a safe deposit box, then this is again a waste. The nuance of the implementation is that the bank specialist will have to make a check of the precious metal. Of course, the ideal option would be if he performs the procedure in front of you. But since the ingot cannot be passed through the detector, it will have to wait.
Which coins are better to invest in?
The cost of a coin directly depends on the price of the metal from which it is made. You can choose any coins for investing.
You don’t need to pay VAT on purchases. When selling before the expiration of 3 years, the state obliges investors to pay income tax on the difference. If the coin was kept in your hands for more than 3 years, then you are exempt from paying tax. The main advantages of this method are that they are compact in size, and their storage is not difficult.
The disadvantage of this type of investment is that the Bank of Russia makes a mark-up from 3 to 20% of the value of the metal in its pure form, and after the mark-up is made by second-tier banks.
Commercial banks are also willing to buy coins back, but for this they charge a discount of 30% of the market price of the coin. Therefore, before returning the coins back to the bank, please read the terms of the refund.
Investors get a good income on commemorative items that are made of precious metals. They are in constant demand among collectors. In addition, over time, their value will grow much faster than the quotes of pure metal.
Thanks to digital technologies, you can now open an impersonal metal account in many banks. The peculiarity of this method is that the precious metal will be virtual, and you will see its amount on the account. To open such an account, you must have a passport, identification number and funds for the purchase of precious metals.
The account is opened for any amount and linked to any precious metal. You don’t need to pay VAT. With virtual grams of gold, you can perform the same operations as with real ones. If you decide to withdraw your deposit in bullion, you will need to pay 20% VAT. It should also be noted that the MHI does not have insurance. This means that if a commercial bank loses its license, there will be no compensation. How and in what metal to invest money? Some banks allow customers to open an urgent compulsory health insurance plan. In this case, the deposit will be rewarded. However, if you decide to close the deposit prematurely, the entire reward will be burned.
What is the best way to invest money in gold using mutual funds?
You can do this through a mutual fund. There are mutual funds that can invest in silver, gold and other precious metals. Instead of bullion, you will be given a share, the price of which will be determined by the contents of the basket. What to do with the metal — buy or sell – will be decided not by you, but by the management company.
Many investors also believe that they can save their own savings by buying jewelry. If you think that you can earn money by purchasing rings, earrings, bracelets and headsets, then you are mistaken. As a rule, they have an inflated price, which is several times higher than the value of the metal contained in them. When they are implemented, the metal quotation is taken into account. The conclusion is that you will only get back 1/3 or 1/2 of the costs incurred. The only exceptions are royal jewels, which will be of interest to connoisseurs of antiques. Based on this, make conclusions about whether it is worth investing in gold in the form of jewelry or whether it is better to choose another option.