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Reasons Why Precious Metals Are a Smart Investment During Financial Crises

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Financial instability is at its highest, and people’s outlook and confidence in the economy have taken a hit. During financial crises, banks fail, and the stock market performs poorly, which causes investors to lose their night’s sleep. It’s no wonder that managing your investments can be a nightmare.

However, investing in precious metals can be the safety net you need during these uncertain times. Here’s why you need to set up a best precious metals ira account. But before that, let’s delve deep into the crash of 2008 and see how it affected investors in the country.

The Crash of 2008

The global financial crisis of 2008 brought the world economy to its knees. While major corporations bankrolled with taxpayers’ money, hardworking Americans had to endure a lot. Many Americans lost their homes, retirement savings, and jobs, and some are still struggling to regain their lost financial standing.  

These economic crashes only help the rich get richer by exploiting investors. If you think the market collapse was a one-off incident, you need to revisit history. These crashes have been happening at regular intervals, with the Wall Street Crash of 1929the OPEC oil price shock, and the Dot-com bubble being some other examples.  

Fast forward to 2022, the financial system is still chaotic. A series of events in recent years, like the pandemic, and Russia’s invasion of Ukraine, have led to a spike in energy prices that have depressed consumer spending. This has slowed down economic activity, and as a result, stock markets are experiencing a major sell-off. Some experts are even warning of a recession that’s expected to be far greater than the one we saw in 2008. 

As the economy crumbles, more and more people are looking to precious metals as an effective way to keep their wealth secure. Learn about the benefits people can derive from these alternative assets and how you can get started today. 

A person searching for a precious metals dealer online to open an IRA account.

A Proven Track Record in History

Precious metals such as gold have a demonstrated track record of being stable during uncertain times such as during the Great Depression, World War II, Asian Financial crises, and the recent pandemic. Whenever economic or geopolitical uncertainty has risen, so has the price of gold.

Before paper currencies, people used to pay in gold or silver coins to conduct trade. Precious metals have a perceived value across cultures, time, and geography. They are scarce, which makes them a valuable commodity for people to have in their possession. 

A person looking at their portfolio performance.

Real Demand and Supply Fundamentals at Work

Precious metals such as gold, silver, platinum, and palladium have practical utilities that give them their value. Gold jewelry has been worn by women for thousands of years. The tradition isn’t slowing in the current century, with countries such as China and India expanding their markets for gold jewelry.

Similarly, platinum and palladium are used in the automobile industry as well as have applications for future technologies. Silver is known for its durability and is used in a wide array of industries such as dentistry and electronics.

On the supply side, these precious metals are finite and come from mines. They cannot be printed out of thin air like modern-day currencies. Crypto coins aren’t much different and are only digital coins that people get from a computer algorithm.

Investors that can keep track of these fundamentals and understand their dynamics can experience capital gain. 

Gold coins for investment.

To Hedge Against Inflation

During a financial crisis, the value of paper currencies erodes at a faster pace due to inflation. Precious metals outperform other asset classes such as bonds, stocks, and even new emerging asset classes like crypto. Cryptocurrencies have shown to be even more volatile than stocks.

As the value of precious metals like gold rises during uncertainty, you can hedge against volatile global markets by investing in precious metals. This makes them a trustworthy form of wealth creation that you can rely on to build your child’s college fund or retirement nest egg. The investments also stay stable and can help you create generational wealth.

Helps to Diversify Your Portfolio

Investors that only have stocks, real estate, and crypto in their portfolio can find precious metals as valuable additions to the roster. The rise in the prices of precious metals will balance against the decrease in stocks and help you create a diversified portfolio. Besides, reducing portfolio risk will improve the risk-adjusted return and create more opportunities for you to profit from.

Importance of Finding a Reliable Metal Exchange

To have a good experience when dealing with these precious metals, it’s important to find a reliable metal exchange. Find a company that is certified by associations like the Professional Coin Grading Service and Numismatic Guaranty Company.

Look at their reviews to assess their customer service. See how the costs of metal exchanges stack against each other. Some exchanges have high costs due to expensive setup fees, transfer fees, and storage costs. They also have high buyback fees, which increase liquidity costs for their clients. 

A person searching for a precious metals dealer online to open an IRA account.

Select an Affordable Precious Metal Exchange

On the lookout for a full-service precious metals investment dealer? At Orion Metal Exchange, we help investors buy the finest gold, silver, palladium, platinum bullion, and coins so they can protect their investments from volatile periods. We have an A+ BBB rating and a 4.9 rating on Trustpilot. This shows how seriously we take our reputation. We have an in-house IRA department that helps people set up their precious metals IRAs

See what our customers have to say about us on Trustpilot.

Get in touch with us now to learn more about our services.

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