Precious Metals: Unsolicited Questions to Consider Before Investing
Have you been thinking of investing in precious metals? Well, think no more, just read the following answers to all your questions.
1. Who Should I Buy From?
If you want to purchase any precious metal, then you should only buy from a licensed, insured, certified, and reputed dealer or company. Numerous genuine companies offer authentic and insured precious metals. To find out more, you can visit the website of Indigo gold bullion.
2. How liquid is my investment?
No doubt, an investment in precious metals takes long enough to give decent profits. You should note that any precious metal bought is a long term investment, and you should invest only that part of your savings which you might not require for a long duration of time.
However, the future is unpredictable, and what would happen if you confront a circumstantial change? In that case, you should know how fast can you liquidate your investment, i.e., turn your investment back into cash. Moreover, your precious metals are your emergency cushions, so you should always have a few trusted buyers in mind who could quickly transact your metal for money at times of need.
3. Which Precious Metals Should I Invest In?
There are four widely known precious metals, i.e. Gold, Silver, Platinum, and Palladium. You can invest in any one of these. However, you should know the merits and demerits of investing in each metal.
For example, gold is a monetary metal, which means it is equivalent to currency. If you have a lot of money to invest, then you should invest in gold. On the other hand, silver is more affordable. It is used in the technology sector and varied industries also. Therefore, it is more liquid than gold.
Palladium and Platinum are also counted as precious metals. They find enormous utility as auto-catalysts. However, If you are thinking of investing in them, then you should expect comparatively lesser returns from them.
4. Bars or Coins?
This question has always been a topic of debate. Some prefer sovereign coins over minted bars, while others prefer the bullion. So, where should you invest when you have both options open for you? The answer to this question depends on what kind of investment do you intend to make?
If you have a lot of money to invest in precious metals, then you should invest in bars. However, if you want to make a small investment then you can put your money in coins. Moreover, you should estimate how soon you might need that money. If the time of need could fall upon you sooner, then you should choose coins to invest as they are easy to trade and are highly liquid; otherwise, you can invest in bars, as they are highly profitable.
5. What about tax?
Different countries have different taxation systems, and therefore, you should educate yourself on how your government would tax yours. Australia has three types of taxes:-
- Buy-side tax (Goods and Services Tax),
- Sell-side tax (Capital Gains)
- Self-Management Super Fund (SMSF)
If you are going to become an active investor in precious metal, then you would be considered a businessman, and hence, would be taxed as the same, which means your profit would be considered as a taxable income.
6. Physical or paper?
The choice is yours to make and should be made depending on your investment type in line with your future goals. One logical explanation for investing in precious metals is the ownership of portable assets, which is no one else’s liability. However, some other investors prefer a convenient investment, and thus, choose the alternative.
You should decide what kind of investment suits you. No doubt, owning a physical asset has always been a better option; however, if gold certificates and futures contracts appear more convenient to you, then you can choose them too.
Every investor should make some room for precious metals in his/her arsenal, as the commodity has enormous benefits as an investment.