How Investing In Precious Metals Helps In Risk Management
13 December 2022
Precious metals have been financial assets to global civilisations for centuries. From the fixed fascination of gold to the lustre of indium, precious metals have maintained their allure, and for a good reason: they are reliable. Standing the test of time, they have an established reputation of secured wealth, stored in reserves as a long-term investment with plenty of benefits for investors.
1. No Counterparty Risk
Precious metals like gold, silver, and platinum do not depend on any people or institutions to give them value. This is helpful during times of inflation, economic uncertainty, and other pitfalls of the financial sector. Precious metals are highly liquid assets and will always be recognized for their worth, selling for cash with ease and minimizing the risk for investors of being fleeced of their value.
Physical precious metals offer the most security. Exchange-traded Funds (ETFs) hold value, but the issuer of the metals must have the actual goods on hand to validate the ETFs paper you own. While ETFs are more convenient to procure, solid and physical precious metals such as gold bars will always provide peace of mind and tangible proof of your assets.
Precious metals have a low correlation with other asset classes, such as stocks and bonds. This means that when the value of stocks and bonds falls, the value of precious metals may rise, helping to offset losses in other parts of the portfolio.
For investors to rely on assets in a single avenue, monopolizing their wealth in just one area, is risky. If those assets depreciate largely, another class is needed for a financial recoup. Precious metals are different because although their value may fall, their inherent worth will never make this number drop to a zero. This allows for a diversified class of assets for investors to have a steady hand over their wealth.
Compared to other hard assets like fine art pieces and timepieces, the price of precious metals is transparent and can be acquired easily by visiting a registered bullion dealer, such as Silver Bullion in Singapore. The value of these metals is also transparent within the market, allowing for a dependable financial trade when converting these metals into cash.
These reinforce the reliability of precious metals in preserving investors’ wealth and allow for a reasonable price back when trading these metals in. Their value is recognized worldwide and will offer security over other hard assets they might be subjective in the marketing.
4. Safety Against Geopolitical Uncertainty
In times of war or political instability, the value of traditional investments can be negatively impacted. On the other hand, precious metals are often seen as a safe haven asset in times of crisis, making them a valuable addition to any portfolio. Where traditional currencies were affected by geopolitical risks within shorter periods, precious metals held their value over extended frequencies and were most resistant to these changes.
This allows for the best defense when investors look to hedge against these financial instabilities, offering them more stability within their assets as these metals prove hard to depreciate.
The Reserve emphasizes safe and secure services, and our gold vault storage in Singapore reflects quality and capacity. Our facility is designed to keep your valuables safe amidst geopolitical upheavals.
Precious metals have proven to hold up their worth through economic highs and downfalls and are a reliable constant in investing assets. Powering above currencies, their sheer scarcity holds intrinsic value, fighting against inflation and financial risks when obtained physically.
The Reserve is built to house these precious metals and other assets through our highly secured precious metals vault storage partner, The Safe House, in Singapore. We know how precious your assets are, and we offer services that aid you in effectively securing them. To find out more, feel free to contact us here.