“It is sensible to diversify investments in terms of stocks from numerous industries.”
This is a common theme used by investors all over the world. When someone speaks of diversification, most people think of putting their money in stocks that span a wide array of economic sectors but in simpler terms, it just means, “not putting all your eggs in one basket”.
During periods of market corrections or political instability even, the most diversified investment portfolio is at risk of suffering huge losses. This is exactly why “savvy” investors are adding precious metals to their portfolio. Precious metals like gold, silver and platinum have many common traits such as being heavy, durable and they tend to be rare. However, with the common factors considered there is also a great variance in the price patterns between each individual metal. Precious metals are typically viewed as a safe haven investment during market volatility. During the period between 2007 and 2011, many investors rushed to precious metals as a safe haven from a plummeting stock market and weakening U.S. Dollar.
When investing in precious metals it is wise to purchase a wide variety of precious metals ranging from gold to silver and platinum and also include different sizes and forms from coins to bars and bullion. This wise diversification will put you in a good position to barter should the economy crash and at the same time it will act as a hedge against the possibility of one metal taking a downward turn in price.
Of all asset classes, precious metals have the least association to the stock market, cash and bonds. This means that any investor who holds investments in any of these classes will need to of a matter of urgency consider maintaining a portion of their portfolio in precious metals as well.