This title was given to us by someone new to investing in physical precious metals. It's an extremely valid question and raises some key considerations.
From the outside looking in, precious metals investing can appear stress-free. By this I mean it doesn’t require acute and long-term knowledge of the stock market, with all its jargon. It doesn’t require you to install and learn any new trading platform on your home computer. It doesn’t require those two-hour stifling meetings with your independent financial advisor, in what are usually internal rooms in the back of a financial services office, as if poor ventilation equates to higher personal privacy!
All it requires is a phone call or a browse on an online Gold Bullion dealership. Pretty neat huh?
Investing in Precious Metals can be stressful too though - because it is investing! And investing our hard earned cash is stressful precisely because it’s 'hard earned'. If it were the least stressful way to earn money everyone would be doing it and not everyone is.
So, what does the question mean – is it the least stressful way to earn money?
Is the perception, I wonder, that one’s physical Gold and Silver just sits there, increasing in value, while we don’t have to pay a trust fund manager or broker to trade for us? Potentially, yes.
But, here are some reasons why investing in Physical Gold and Silver can be stressful:
I have chosen this reason to go first in our list because it’s not related to the actual market but our perception and fear of loss. The only loss we might imagine with our investments in the stock market is that the price will go down. We imagine we will lose our profit. The additional loss we might imagine with our investment in Physical Gold and Silver is the loss of the metal itself, through burglary and theft. No one can burgle our stocks. (Or can they? But that’s another question for the morning of the next stock market crash.)
So, by looking at this reason for stress directly in the eye we can mitigate it in a really rather simple way. And that is by good storage and insurance. Bleyer sells a variety of safes for straightforward home storage. It is important that such safes reach certain industry standards to comply with your home insurance policy. If you don’t insure or store your Gold and Silver, it may not be covered by your level of insurance for items kept at home.
If this concerns you, and your holding of your physical precious metals is significant, or you’d for any reason rather not disclose your worth to an insurance company, then consider discussing the option of Bleyer storing your bullion for you. And note I wrote “your” bullion, it never becomes ours. It’s yours, stored in an allocated account under your ownership, your name, your number. Bleyer’s CEO, Caroline Peers, regularly visits the facility Bleyer uses, to personally inspect client holdings.
The Gold and Silver price moves up and down like any investment. But, some weeks or even days, this can feel like a roller coaster ride. This is a natural part of investing in any asset that gains its price from price fixing on the markets. By that I mean, the price we currently pay for our physical Gold and Silver is set within the paper markets. I would raise the supposition that the real value of physical Gold and Silver is much higher than the 'price' attached to an ounce traded in paper. And a quick few minutes researching the reasons why will show you that I am among myriads who feel and think the same way.
Let’s also look at some tips on investing in Gold and Silver. Keep these in mind and you'll find investing in precious metals can be a stress-free experience:
1. Stop Checking
How often do you look at your portfolio? If it’s anything more than once-a-day, you’re displaying behaviour akin to a trader rather than a long-term investor.
Of course, never checking the health of your portfolio can be just as bad. How can you know whether you’re on progress to meet your financial goals or required rate of return if you never check how things are going?
There is a solution. Simply set up price alerts for when Gold and Silver rise or fall by say, 5%. This way, you won’t be anxiously glued to your computer screen. It’s also worth accepting that you have absolutely no control over what happens in the market, only your attitude towards risk. If you’re losing sleep over how your investments are performing, it’s worth asking if your asset allocation truly reflects your risk profile.
2. Be Realistic
When it comes to performance, it pays to keep expectations realistic. This can apply as much to ourselves as the companies we choose to invest in.
Investing legend Peter Lynch once asked a group of wealthy retirees living in a beautiful location whether they had managed to beat the market. Their response? They didn’t care. Most were simply happy to live out their twilight years in absolute comfort.
Lynch’s point here is one we can all subscribe to. Don’t bother comparing yourself to a certain benchmark or quibbling over the odd percentage point. Your assets are making you money. Physical precious metal investments aren't considered 'quick-wins', they're most profitable in the long run.
3. Be Sufficiently Diversified
As much as we’d like every investment we make to be a success, the fact is that a proportion of investments will either struggle or be acquired long before they’ve had a chance to make us rich. Knowing this underlines the importance of being sufficiently diversified. Precious metals do well in the long-term, so why not run other long-term investments alongside this? Read about how Gold value has increased in the last 45 years.
In addition, it is important to consider owning several different precious metals. Bleyer offer the purchase of Gold, Silver, Platinum, Palladium and Rhodium. Diversification is more difficult if we have developed an attachment to one particular metal. I once knew an independent financial advisor who prided himself on being very well researched on Gold but refused to own any Silver. In a year where they both made within points of each other in profit, this made no logical sense to me, because it made no logical sense! Sometimes we have to override our emotional attachments to an investment to make the most wealth.
I dedicate this next point to my 18-year-old son, who now trades on the stock market from his laptop on an almost daily basis whilst studying for his A Levels. It is one of his mantras at the breakfast and dinner table…
4. Don’t Get Greedy
It sounds simple but many-a-loss was made by waiting it out for the peeks, while free-falling instead to the troughs. Get out and back into Physical Gold and Silver in the happier middle ground and there are still great profits to be made. This requires a more long-term steadier hand than trading on the stock market, but the principle remains the same. The Hare and the Tortoise is clearly not just a children’s storybook. We all understood it was a metaphor when we were in school, but do we let that knowledge sink into our adult experiences in investing?
I could go on to list several other specific causes of stress within investing and investing in precious metals specifically. But the underlining reality is investing is stressful, because it matters. That is why Bleyer offer weekly articles to keep the reality of investment at the forefront of our minds.
When I was 14, I read a book that is now considered a Psychology classic. I remember the first line to this day: “Life is difficult. This is a great truth, one of the greatest truths. Once we truly know that life is difficult – then life is no longer difficult.” M. Scott Peck, The Road Less Travelled.
By focussing on the utter reality that investing in anything will – at times – be stressful, we make it less so.
Investing in Physical Gold and Silver and other precious metals can be a very rewarding, independent and invigorating experience. But it is also based in reality and reality has its twists and turns, much like the markets.
To talk with one of the Bleyer team call 01769 618618 or email [email protected] to request they call you at a convenient time to you. Or if you’ve been down this road of investing before, simply browse the website at bleyerbullion.co.uk for up to date special offers and the latest releases.