Adding Precious Metals to an Investment
In the history of the world one thing has managed to keep its value despite wars, famine and fiscal meltdowns. In all that time the precious metals gold and silver have retained their value. There is no currency in the world today that is backed by precious metals, they are all "fiat currencies" which means they only retain their value for as long as the issuing government says that they have value. Take a look at a Zimbabwe Trillion Dollar Bill and a lump of gold. Which one still has value?
Investing in gold and silver has never been as easy as it is now. There are a couple of different ways you can do it. One way is to buy a gold or silver ETF (Exchange Traded Fund). These funds track the price of the metals they are following and provide a quick and easy way to invest. They are quick and easy to trade making them very liquid and are useful if you do not want to stay in precious metals for very long. The downside is that, like anything else, they can become mismanaged and their value can plummet.
There are a few companies out there offering to sell you gold and store it on your behalf. There are two major types of account, unallocated and allocated. Unallocated is the cheapest option, is this case the entity has a pile of precious metal and you buy a slice of it. You are issued a certificate to say that you own a bit of one of the bits of metal. The storage fees are low but you are on the hook because the pile of metal is still actually owned by the entity you invested with. If that entity goes bankrupt all you will have is a piece of paper saying that you own a part of nothing. With allocated storage you buy individual bars and have them stored for you. You have legal ownership of the bars and they are yours in the event that the entity goes bankrupt. There are storage fees based on how much you own. One drawback with this (and it has happened several times) is that the entity goes bankrupt and you find out that they did not actually purchase or store any metal for you.
Actual ownership. Yes you can buy and take possession of gold and silver bars and coins. You can store them wherever you want and then sell them later either online or in a coin shop. If you are going to hold gold and silver for any length of time then this is the option I would suggest. You can buy small amounts monthly and store them in a box in a closet if you want. Over the course of time the stack will get bigger and you may want to graduate to a fireproof lockbox to protect them in case of fire which will melt them. This system has one big advantage which is that you actually have possession of the items, no amount of bankruptcies or mismanagement of other companies can take them away from you. There are many types of bars, coins and rounds (bars in a coin shape) and the best part is that you cannot really go wrong with what you purchase. Some people stick to one type of bar or coin while others get a little bit of everything. Some big names out there are "JM Bullion", "APMEX" and "Provident Metals" among others.
In order to get started go to one of the websites I mentioned or find another one that you feel comfortable with. Create an account, find a few "American Silver Eagles" (always a good choice) and put them in the online cart. Make sure that you have enough to avoid shipping charges (usually $100) and hit "Checkout". Pay for them and wait a few days for them to arrive. Once they arrive put them in a box in the closet. It is that simple. Now repeat that every month. If you get bored of Eagles then buy some Maple Leafs or Libertads or even a few bars.