The Coke & Pepsi Of Precious Metals

For many years, when people have asked me what form they should buy precious metals in, I first ask them, “Is this primarily an investment – something that you expect to appreciate in value, or is it primarily an insurance policy to cover you in troubled economic times?”

If they say that it’s primarily the latter, I suggest that they consider buying metals in the form that would be the most saleable - not now, in relatively quiet times - but in the middle of a crisis, when there is widespread fear and even panic.

So, what might that form be?

Well, a mix of metals, primarily gold and silver would be likely to attract the largest number of buyers in a crisis. To be sure, platinum and palladium can be expected to rise in value in a crisis, but there will be fewer buyers who understand them. They, therefore, fall more into the investment category, not the insurance policy category.

In a crisis, the ideal is to focus on the largest group of possible buyers so that, should you need to sell all or a portion of your policy, the maximum number of possible buyers is available to you at short notice.

This doesn’t mean that you will choose to sell at short notice, or at a disadvantageous time, but it does mean that, if the coming turmoil changes your personal economic situation, you’ll have the ability to shift gears quickly.

And on any given day, either gold or silver may be the hottest item, so you’d want to be holding both. Silver tends to be the more volatile of the two and is likely to rise more substantially in price, whilst gold is looked upon more as a store of wealth than silver.

We will therefore see some buyers who are looking for both, but many will be seeking only one or the other.

But what form would you buy them in?

Well, silver, having a lower price, tends to be offered in larger weights. As an investment, 100 ounce bars are common and even 1000 ounce bars are available. However, the latter may not be ideal as an insurance policy. Silver at $25 per ounce would price a 1000 ounce bar at $25,000, but silver at $100 per ounce, as might easily occur, makes the bar $100,000. The number of buyers at that price would be fewer. In addition, if you only needed, say, $20,000 at that time to cover your expenses, you couldn’t simply cut off a $20,000 slice from the bar and sell it.

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Disclaimer: The information, opinions, and financial data presented are for educational purposes only and are not intended as investment advice. No guarantees are made as to the accuracy of the ...

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