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Stocks or Precious Metals – Which is Better for Investment?

Stock market analysis on a laptop screen

Stocks are powerful wealth-builders that offer high RoI (returns on investment) to the investors over time, but they also go down ways when the company isn’t performing well. Investing in gold or other precious metals allows you to own a permanent store of value, but they’re tangible and need extra security.

Below we have discussed the pros and cons of each asset so you can decide which investment will be better for you.

Pros of Investing in Stocks

  • As mentioned above, stocks have higher returns on investment than most investments, and you can build significant wealth in the longer run.
  • There is a huge variety of stocks, and you can invest in different kinds of companies. Whether you prefer new ventures or large and established companies, there are stocks that suit everyone’s needs.
  • You don’t need a large sum of money to buy stocks. Many retail brokers allow you to trade stocks without any commission. Also, if your broker allows, you can buy fractional shares of a stock out of your budget.
  • Stocks have higher liquidity. You can sell your stocks anytime to convert them into cash with low transaction costs. However, stock prices are volatile, so you may face losses by selling them at the wrong time.

Cons of Investing in Stocks

  • You can’t start a stock investment without having the financial knowledge or ability to read financial statements and reports unless you hire someone to do that for you, which will cost you extra. With stocks, you constantly need to monitor the stock market and conduct thorough research before investing.
  • There is a considerable risk of losing your entire investment if the company goes broke or isn’t performing well. You also lose initial investment while selling a stock when its price plummets.
  • When you earn a profit by selling a stock, you need to pay capital gains tax.
  • Stock prices rise and fall each second, which is the major drawback causing panic and loss among investors.

Pros of Investing in Precious Metals

  • Precious metals are tangible assets that you can hold and adorn for a lifetime. They don’t need any maintenance and don’t deteriorate over time or get damaged.
  • Investing in gold can help you earn a profit because it is inversely correlated to traditional assets. Risk-averse investors pursue gold over stocks, which increases its value.
  • Precious metals can’t be erased or hacked like many other digital assets. It doesn’t rely on technology or the internet.
  • Being a tangible asset, they don’t need large space for storage and can be kept private and confidential, unlike other assets. Also, they are portable, which gives you many options to keep them safe.
  • You can start investing in precious metals without special knowledge, training or skills.

Cons of Investing in Precious Metals

  • Precious metals are not as liquid as stocks. Although some states have made gold and silver legal tender, you can’t buy a home or a car with gold coins.
  • If you have owned metal for over a year, you’ll have to pay capital gains tax.
  • Although they require relatively less space for storage, you still need a safe place to keep them. If you’re not careful, you might lose them to theft.

However, the storage and liquidity issues can be resolved with online storage. With our online storage account, you can buy, store and sell gold at any time, like a stock that gives you liquidity.

Gold bars

Since you have to pay capital gains tax on both investments, the advantages of precious metals outweigh stock advantages. Metals are a safer investment with low risk and complexities, and there are no dramatic ups and downs in their prices or the pressure to sell or buy. They also make a great diversifying asset for your portfolio.

Orion Metal Exchange is a leading precious metal investment and storage company where we help you invest in gold, silver and other precious metals and build a profitable investment plan. You can get secure private vault storage rentals, expert recommendations, and many resources to enjoy the profits you deserve. Contact us for details.

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