Deciding to invest in commodities is not something that should be done lightly. Because of the nature of the markets (that being highly dependent on supply and demand), they can be somewhat of a risk. Especially if you are deciding to get involved with energy, livestock, or agriculture.
Our world is changing rapidly. As certain countries start to manufacture more or as a disease takes out livestock, the supply and demand can change with the flip of a coin. That is why we need to be so careful when picking these assets for our portfolios.
There are plenty of options out there, though. One of the most popular forms of commodity to invest in are precious metals. Those are gold, silver, and platinum for the most part. There are a few others on the period table of elements that are considered in this category, but I will focus on those “big three” for this article.
First, let us discuss gold. Historically, it has almost always had a place in our hearts and minds. Usually, it was connected in some form to money. Many coins were made of this metal, and some remain gold-plated. Following World War II, however, many countries stopped using it to make their currency.
However, there are plenty of other uses for it. One of the primary ones that might come to mind is its use in jewelry. If you are curious to learn more about how it has been used in history, you can read here: https://www.gold.org/history-gold. Some of the most famous uses of it for jewelry were making scarabs or ankhs in ancient Egypt.
The Romans also utilized it in abundance. Many monarchs across the world did. Of course, most of us know that the Spanish monarchy sent the conquistadors out in search of more gold (which they did end up finding). How is it used today, though?
Well, for the most part, this has not changed. Many rings, necklaces, bracelets, earrings, and more are still made of this metal. A lot of us propose with a diamond ring made of gold!
Investing in gold is nothing new, but it has taken some new forms. Instead of hoarding huge gold bars (or bullions), there are more options we can take. Of course, you still can purchase them, but they are now more compacted than they used to be (usually) for ease of transport and trade.
Stocks, EFTs and ENTs, and mutual funds are all ways you can get involved in this market. It will depend on what you are most comfortable with. Choose what makes the most sense for you.
While this metal might have less of rich history, it was still used by many groups of people. Once again, the Egyptians coated some sarcophagi in this precious metal. It is whiter in color and quite shiny. That is what distinguishes it from silver.
Funny enough, we return to the Spaniards briefly. The Indigenous peoples of South America used platinum in jewelry. When the conquerors came and were mining gold, they ended up discarding a lot of the platinum they found because they did not think it was valuable.
However, as we began to see how beautiful it was when investigated by metalworkers. As it was used for lab equipment and decoration, it started to become more popular and thus more expensive. The prices began to really boom in the 1970s.
Today, it is not found in bullion form very often. Sometimes it is incorporated into jewelry. However, the most common use for it is in car manufacturing. It is used in catalytic converters for engines. Additionally, you can find it employed by oil rigs to extract gasoline from crude oil and in electronic manufacturing for computer hard drives.
For these reasons, it might be a good addition to your investment portfolio. It is still fairly rare, so while its value remains volatile due to its nature as a commodity, it is more stable than others. You could even consider adding it to your IRA Financial Group even if most of them deal primarily with silver and gold.
Last but certainly not least, we have silver. We have traced the mining of silver all the way back to 3000 B.C.E. and the ancient Greeks. They had crude ways of refining it as well and probably used it in everything from coins to armor to weapons.
While gold eventually became more valuable, silver has maintained its place as a staple in the world of precious metals. It is useful in jewelry making of course, but it is employed in other ways as well.
For a long time, it funded many currencies in the world. It was used in many coins. However, once most nations moved to the Gold Standard instead of the Silver Standard, its use declined in this way. Many coins still emulate this appearance though.
The market for this metal has fluctuated a lot. This was particularly true in the twentieth century. Because the United States government invested a lot into the industry, it became one of the largest buyers of silver in the world. However, let us turn our attention to the more contemporary uses of this metal.
As you can see above, it is still used in jewelry or decorative pieces. While pocket watches are no longer the norm, they are still collected by some. Additionally, the prices of silver have been steadily climbing since the financial crisis of 2008.
So – Should You Invest?
Precious metals are generally a sound investment strategy if you are looking to add more diverse options to your folder. Due to all the different methods of involving yourself in this market, you can mitigate your own risks. It is all about what will work for you.
I cannot tell you where you are in your life or how healthy your finances are. All I can do is remind you that these commodities are out there and are solid options for your portfolio!