Why You Should Invest In Platinum

By on December 18, 2012

In today’s uncertain financial times, it’s a wise idea to start investing and protecting your assets for the future. A good way for beginning investors is in coins and precious metals: it can be less expensive and not as complicated as investing in real estate, stocks, and bonds. Also, precious metals tend to remain relatively stable and valuable in changing markets. Some change in value does occur, but those who invest in precious metals tend to face less risk of their assets losing their value practically overnight, as has not been the case with some stocks and bonds. Lately, platinum has become a viable choice in precious metal investing.

While gold, silver, and copper have been known and used as currency for thousands of years, platinum being used as a precious metal is newer, relatively speaking. Spanish Conquistadors first started using platinum as currency while mining for silver and gold, and by the late 1700s, platinum was in use around Europe. However, its rarity and difficulty to work with cause platinum to remain less popular in coin form than gold and silver. While 82 million ounces a year are mined in gold, and 547 million ounces in silver, platinum is much rarer, coming out of new mines at only 5 million troy ounces yearly. Platinum is difficult to work, but durable, as it doesn’t melt in fires – unlike gold and silver.

Many reputable gold suppliers and trading companies suggest that investors hold 10-20% of their portfolio in precious metal. The price of gold is still a sound way to profit over time – and in recent years platinum has surpassed the value of gold by two or three times. However, care should be taken when investing in platinum. In good financial times, the rare white metal can fetch a decent profit, but during an uncertain market, its value can drop because of reduced demand. Still, the overall value of platinum means that it could be worth holding onto a collection of platinum coins for the inevitable upsurge in resale value. The storage options for small collections of precious metals and coins also make them attractive for new investors: these collections can be kept at home or in safe deposit boxes, for little to no recurring storage fees. Investing in “paper platinum” – for example, holding shares in platinum with a bank, is another way to invest.

Because of the difficultly in working the metal, there isn’t a huge variety of newer coins on the market, but there are some popular coins, such as the Canadian silver maple leaf, that are valuable in bullion form. Many experienced coin collectors recommend steering clear of TV infomercial-type coin dealers and “mints,” which usually charge several times more for a commemorative coin than you’d get from a reputable dealer. Collectors recommend buying coins in bullion form or at least the highest grade you can afford. Buying coins online can be a good way to build your collection at a better price than local dealers, but carry certain risks, such as fraud and counterfeiting. Always research the coins you’re interested in, and check out the dealer before paying for any precious metals, whether you’re buying online or in person.

If you’re new to the investing game, or are interested in padding your portfolio with precious metal, it’s worth educating yourself on platinum and how adding bullion and collector’s coins to your investment can help your financial future.

Great Southern Coins is a leading platinum coin and precious metals firm recognized as one of the leading coin dealers and one stop location for all your precious metal needs.

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