Investing In A Precious Metals ETF

Investors who are looking for a good growth investment might choose to purchase precious metals. These include gold, silver, platinum, and palladium. There are options to consider when investing in these metals, such as whether to purchase the actual physical bullion or coins, or buy precious metals ETF, also known as exchange-traded funds. Exchange traded funds are actually much like mutual funds, in that you are not purchasing the actual metals, but a paper representation or promise of their existence.

Purchasing precious metals exchange traded funds is simple to do through any discount broker (I prefer Tradeking), unlike purchase of the physical metals. All four precious metals have shown significant growth in the last year that appears to follow each other in trends. Some people prefer to invest in just gold or silver, while others choose to invest in all four. This is done to diversify but frequently the four metals trend up and down together, so a better diversified portfolio might include other investments in addition to any or all of the metals.

Gold has long been considered good investment, and has been the most popular of the precious metals. Silver has also been on the rise due to the recent economic recovery and increase in manufacturing. Platinum and palladium show promise of continued growth as well as the other two, with some speculation that the palladium stores are diminishing while industrial uses are increasing. There are inherent risks in purchasing exchange-traded funds as opposed to the physical metals.

One of the risks of ETFs is the additionally volatility of the market due to the fact that these are paper representations of the metals, and not necessarily backed by the metals themselves. Purchasing the gold or silver and keeping it locked up safely carries less risk, although the market fluctuation could still cause a loss in your investment. There is no sure investment and all carries risk.

With the economic growth of the last year, and in light of predictions of continued growth, investments in metals could make sense for someone looking for a good investment. Production and manufacturing is on the rise, as are jewelry sales. Many of the precious metal mines are anticipating increased production to meet the projected demands. The return on metals can be greater than that of mutual funds and some other stocks, and precious metals ETF can be purchased in small quantities through a traditional broker, even discount brokers