These days, more and more people are getting into investing in precious metals. So, what’s behind this growing interest? Let’s explore why precious metals are becoming popular among investors, how they can protect against potential losses, the best places to trade them, and how to start a Precious Metals Individual Retirement Account (IRA).
Why Investors Are Turning to Precious Metals
When the market shows signs of instability, many investors turn to safe bets like gold, silver, and platinum to protect themselves. Historically, the value of precious metals tends to rise when the stock market takes a hit. So, adding these metals to your portfolio could help safeguard your investments.
But why worry about losses if the market is doing well?
Even though the stock market has been booming recently, with stock prices hitting record highs, there’s still a reason for caution. Stock valuations have been growing faster than corporate earnings. Taking a look at the Schiller PE ratio—which compares stock prices to earnings—we see it currently at 26.5, while a sustainable market usually has a ratio around 16.
There are other warning signs too. For instance, oil prices have dropped significantly, losing over two-thirds of their value recently. OPEC decided to maintain current oil output levels to curb American shale production, which could force many U.S. shale companies to shut down and lead to widespread job losses. This could result in a market downturn.
Geopolitical issues also add to the market’s instability. The rise of terrorist groups like ISIS and the continued conflict between Russia and Ukraine, along with Western sanctions on Russia, create further uncertainty.
How to Start a Precious Metals IRA
Since precious metals can be a good defense against stock market losses, setting up a precious metals IRA is a smart move. Here’s how you can do it in three simple steps:
1. Open an account with a reliable broker like Goldco Precious Metals.
2. Make your initial deposit into the account.
3. Work with your broker to craft an investment strategy for future growth.
Beyond IRAs, there are plenty of other ways to invest in precious metals. It’s a good idea to talk to your financial advisor about how adding gold to your portfolio can provide an extra layer of protection.