This is one of the most frequently asked questions that the investment professionals of Royal Bull Silver & Gold are asked, and it’s one that we’re always excited to answer.
The answer always is: it all depends. Just like any other investment, determining how much you should invest in precious metals depends on many different factors. Here are some of the most important things you should consider when you invest in precious metals:
Consider your age before investing in precious metals
For young people, precious metals can be seen as a wise and long-term investment. Here in Canada, those under the age of 18 are not allowed to own real estate or stocks, but owning gold and silver is easy and completely legal.
Those who are middle aged need to consider what the performance of precious metals can give them in 20 or 30 years, while older investors should consider the value of their gold and silver as it plays an important role in their near future as well as a wise family investment for children and grandchildren.
Consider what’s happening in the economy before investing in precious metals
Historically speaking, precious metals often rise in value when the economy falters. That is because investors lose faith in traditional business models and seek stability that precious metals often provide.
That being said, wise investors rarely make rash decisions based on short-term fluctuations. They not only think about the health and stability of the current market, but of the global economy 10, 20 or even 30 years. Long-term strategic thinking often leads to investment success.
Consider your financial situation before investing in precious metals
Just because precious metals can be used as investments doesn’t mean that you should jump right in with your life savings without doing your research.
It is often recommended that you allocate 5–10% of your total investments in precious metals. This number can be higher in troubling economic times, and lower in economically prosperous times.
Also ask yourself if you are financially ready to begin investing in precious metals. This is a big decision and one that should not be taken lightly. Investing never has guaranteed returns and you should consider your financial situation’s ability to ‘weather the storm.’
Can you even afford to invest given your current savings and income? With Royal Bull’s smaller gold and silver bars and coins, practically anyone can become an investor with a very small in vestment. A 1-kg gold bar is likely a large sum for many investors, but for others it may be a drop in the bucket.
Some people see sunny economic skies in the future and buy purely to increase their monetary holdings, while others are prepping for the end of the global economy where small amounts of silver are not only a wise investment but a practical way to store and pay for life-dependent goods in the future. Your financial situation might be somewhere in the middle.
Consider your risk tolerance before investing in bullion
People with a high-risk appetite tend to invest less in precious metals since doing so is often a ‘safe bet’, while investors with low risk levels often invest in gold, silver and platinum since future levels are often easier to predict.
Consider what you want to get out of investing in gold or silver
Besides a return on your investment, many investors want “more” – they want something tangible, they want to have fun, they want a conversation piece, they want Something they can be proud of. These are just some of the things you should consider as well. Does anyone really want a boring stock when you can have a gold bar?
Trust the Investment Professionals at Royal Bull
Here at Royal Bull, we can work with you to navigate the considerations you should keep in mind when you ask, “How Much Should I Invest in Precious Metals?” Learn more by reading other articles on the Royal Bull website or contact our Canadian sales and investment team.
