“A bucking bronco” is the best way to describe what has been happening on the stock market in year 2018. On any given day, the Dow Jones can plummet 300-500 points. Then the next day it comes galloping back. And just when jittery investors start to think, “Thank heavens that is over, whatever it was,” the Dow takes a plunge again.
Financial consultants might say, “Okay, a 500-point drop in the Dow represents only about a 2% loss.” And that is correct. And when they are talking about precious metals as an investment, they might also say, “Hey, the price of gold or silver or platinum can also fall 2% pretty fast . . . so why not stick with stocks?”
Well, that is one way of looking at it. Here’s another way. Let’s say that you followed your financial consultant’s advice and bought Google stock in March 2018, because the stock was at a low $1036 and “sure to rebound.” You then felt pretty good at the start of August, when the trading price hit $1268, the high for the year. But as we approach the start of 2019, the price has fallen to about $1036 again. “I should have sold it back in the summer,” you tell yourself. But now, all you can do is sit back and hope its price comes back again. So the value of that stock has risen and fallen over a range of about 25%, which means a lot to you if you own it. Certainly it means a lot more to you than 2% fluctuations in the Dow.
Investments of any kind are chancy. To stand a chance of making money, you have to either be an expert or rely on the advice of someone who is.
But nonetheless, there are reasons why we believe that 2019 will be a year when the investments you make in precious metals, and in precious metal scrap especially, will outperform stocks.
It Is Easier to Predict Rises and Falls in Precious Metal Prices
When the Dow Jones takes a dive, even the best analysts are usually wondering, “Exactly why did that happen? We have theories.” And the price of an individual stock can plummet due to sudden events, like a data breach or the appearance of the CEO before Congress. In contrast, the trading prices of precious metals are generally steadier. There are few one-day events that can cause their value to fall by 25%. They rise and fall in longer cycles.
You Can Watch Trends and Make Predictions about Precious Metal Prices
As year 2019 begins, we have a trade war with China to consider. Tariffs on the price of gold that is imported from China, for example, should cause gold trading prices to rise in the U.S. Tariffs on goods imported from Canada should cause prices of gold to rise too, since Canada is a major exporter of gold to the U.S. And then there is the fact that high demand for platinum for aerospace and other industries is almost certain to keep demand – and trading prices – high for that metal.
So while investing in precious metals does entail risks, smart investors can watch trends and make assumptions about precious metals that are often more reliable than assumptions that can be made about stocks.
Precious Metal Scrap Has Leverage Going for It
When you buy a quantity of precious metal scrap, you stand a realistic chance of buying something at a devalued price and then selling it for market prices. For example, you could invest only $200 in a batch of gold scrap and then sell it for $1,000 after it is tested and refined. That kind of leverage isn’t going to happen in the stock market. (Did you ever hear of anyone buying a share of stock for only a small percentage of its trading price and turning a fast profit? No, you didn’t.)
Stock or Scrap? The Choice Is Yours
Investors have different levels of comfort with different kinds of investments. Some feel most at home when investing in mutual funds, municipal bonds, or in young companies. What kind of investments make you most comfortable – and which promise you the greatest return on your investment?
Those are important questions. But we like precious metals. If you call us today at 800-426-2344 and talk with our precious metals experts, you just might discover that precious metals will be your preferred investment vehicle in the coming year.
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