Promoting A Solid Portfolio Foundation
The following article is created by Orion Metal Exchange for the benefit of our investors and perspective investors alike. We seek to provide relevant content concerning precious metals and the impact caused by the economy and geopolitical trends that will most likely place impact on your financial future. If you are interested in learning about precious metal investing, call 1-800-559-0088, for a FREE investor kit.
In this article we will discuss the difference between speculating with papier-mâché investments designed to replicate gold and owning the tangible asset. One investment vehicle is considered speculation, and the other is viewed as a hedge.
The foundation of a portfolio should be likened to the foundation of a home. A home’s foundation is a load-bearing concrete slab designed to stabilize and support the structure built upon it. A properly diversified portfolio should be based on investment vehicles that will support overall stability and promote economic security.
Precious metal ETF’s, mining stocks, commodity options, and futures contracts are considered speculative in nature and carry a heightened level of risk. Physical precious metals are viewed as a hedge because there is zero risk associated with debt. In other words, no one is borrowing or loaning against the tangible precious metals you own.
Hedging and Speculating in a Properly Balanced Portfolio
A properly balanced portfolio should consist of products intended to hedge and investments designed to speculate. A speculative investment is utilized for the possibility of gains while assuming a possible risk of loss. For example, stock investments are commonly viewed as a speculative investment. A speculative stock investment can go to zero in value.
A investment hedge is a way to protect against total loss. A hedge is a way to offset stock market volatility and speculative investment risk. Physical precious metals are an example of a commonly used investment hedge. Unlike stocks, physical precious metals have never gone to zero in value.
Precious metals have a comparatively low or negative correlation when compared to stock investments. When the value of stocks decreases, precious metals are likely to rise in value and promote portfolio balance and stability. Gold and silver coins are commonly utilized to offset the risks associated with speculative stock investments.
Building a Portfolio on a Solid Foundation
Physical precious metals are commonly viewed as an insurance policy for your portfolio. Precious metal products, such as gold and silver coins can be utilized as a hedge against geo-political uncertainty. Gold and silver are used as investment vehicles to protect against fiat currencies and arbitrary government policies. When the values of other assets decrease, precious metals rise in value and promote portfolio balance and stability.
Precious metals are not prone to mismanagement or mishandling by corporations or government entities. Precious metals are not subject to government policy changes. For example, when you own a gold Eagle coin, no one can borrow or loan against your gold coin. Physical precious metals are free from the risk associated with debt.
The percentage of physical precious metals you own should be based on the current market trends and your personal financial goals.
Promoting Peace of Mind with Proper Portfolio Diversification
Properly diversifying your investment portfolio is essential to reduce risk and build long-term wealth. You can protect your portfolio from market volatility and potential economic downturns with a proper balance between investment vehicles designed to hedge and speculate.
FAQ: Your Key to Understanding!
What are the key elements of a solid portfolio foundation?
Physical precious metals, like gold and silver, serve as an insurance policy against market uncertainty and government policies. They act as a hedge, rising in value when other assets decline, promoting portfolio stability. Unlike assets subject to mismanagement or government intervention, precious metals offer protection from debt-related risks, ensuring resilience in diverse portfolios.
How does Orion Metal Exchange contribute to promoting a solid portfolio foundation through its offerings in gold and silver investments?
Orion Metal Exchange contributes to promoting a solid portfolio foundation through its offerings in gold, silver, platinum and palladium investments at competitive rates. With access to tangible assets, investors can hedge against market volatility and economic uncertainty, ensuring resilience in diverse portfolios. Additionally, contact our IRA department by phone to establish a precious metal IRA account, for buying, selling, and exchanging precious metals within your retirement portfolio.
How can individuals stay informed on precious metal market trends and precious metal product knowledge?
Orion Metal Exchange can offer insight on precious metal product knowledge, past performance, and keep investors abreast of precious metal market trends moving forward. We can assist investors with a precious metals IRA account, commercial insured storage options, and insured home delivery.
Orion Metal Exchange presents this article for both our investors and perspective investors, offering insights into precious metals and their relevance amidst economic and geopolitical trends. To explore precious metal investing further, dial 1-800-559-0088 for a FREE investor kit.
Contact us today to know more about our services.
