Precious Metals Investing Guide

Why invest in precious metals?

Precious metals like Gold, Silver or Platinum shouldn’t be looked at as an investment to make in order to grow your wealth overnight. They should be part of a well balanced investment portfolio which balances risk against other investments you may have in the stock market for example. This is because in times of economic crisis many people sell stocks and buy into precious metals.

Another reason for investing in precious metals whether you want to buy them and store them at home through a site like bullionbypost.co.uk or purchase through a company such as BullionVault.com which will store and insure your bullion for you. Is historically over the long term the prices of precious metals have continued to rise in value with silver having more demand each year due to it’s uses in solar panel manufacture, batteries, anti bacterial uses and many more.

3 ways to invest in precious metals

When it comes to how you can invest in precious metals you have 3 main options to consider.

I will review and give my recommendations further below on this page but here I want to share what these 3 methods include.

Option 1: Buying through an ETF

The most cost efficient way to invest into precious metals is by using an investment platform (I recommend Freetrade). If for example you chose the Wisdom Tree physical silver ETF (exchange traded fund) which tracks the spot price of silver. You would only pay £147.52 in management fees to have £5,000 invested for a period of 5 years. When you make this purchase your investment is backed by physical silver held by HSBC Bank plc.

However in times of economic crises banks have been known to fail and if a closure of the bank were to happen with your silver allocation inside, your investment could be at risk. The saying “if you don’t hold it you don’t own it” rings true here.

Advantages

-Easily bought and sold at the tap of a button on your phone

-No storage fees of physical product

-No insurance costs involved

-Very low cost fund management fees

Disadvantages

-You don’t physically own the metal just a certificate

-If the holding (bank/fund) were to fail you’re investment may not be secure

-You never get to hold any of your metal in your hands (if you wanted to)

Option 2: Buying coins and/or bars to store at home

The second option I want to inform you about is actually buying the physical coins/bars and having them delivered to your home in order to store them yourself.

The sites I recommend doing this through are either Gold.co.uk or Bullionbypost.co.uk. These are sister companies but depending on the product a cheaper price can be found at either one depending what you are wanting to buy. If you open an account by clicking on a link on this page and use code OI4S Y56O then place an order of over £250 you will receive a free 1oz Silver Britannia coin with your order.

Advantages

-You get to physically hold your precious metals in your hands

-No storage fees

-You can take your metals to trade them in and get paid in cash

Disadvantages

-Paying a higher premium for delivery costs and dealer profits

-Not as safe as being held in a vault

-No insurance in the event of a theft or any kind of loss

-Private selling to get the most money takes a lot of effort

Option 3: Buying Vaulted Bullion at Wholesale Price

The final option I want to inform you about is for people who have at least £1,400 to invest into precious metals. The reason for needing a sizeable investment is due to the costs coming down associated with storage fees when buying vaulted bullion at wholesale price.

For example you pay the exact same storage fees on having £100 worth of bullion stored as you do for having £14,000 in storage. With a fee of £69 to store silver for 1 year it wouldn’t be economically viable to invest just £100 and not see much return. Whereas the larger the investment the more value you are getting out of the storage fee.

Having said that. The way this method works is you simply open an account at Bullionvault.com then deposit funds and buy either Gold, Silver or Platinum. The metals are then physically yours but held in a vault in a country of your choosing. These options being Zurich, London, New York, Toronto or Singapore.

Advantages

-The ability to buy bullion at wholesale price

-Ability to sell your precious metal with a minimal spread

-Very efficient way to buy and sell bullion

-Able to trade with other Bullionvault.com members

-Physically own bullion in a secure and insured vault

Disadvantages

-Storage fees too high for any investment under £1,400

-Cannot hold your bullion in your hand (if that matters to you)

Final Verdict

After looking at the 3 options you have then to either invest using an app like Freetrade, home delivery from the likes of Gold.co.uk or buying at wholesale from Bullionvault.com.

You can clearly see there are advantages and disadvantages to all of these methods. I am personally looking to max out my £20,000 stocks and shares ISA with index fund investments and will then be looking to invest into gold and silver through the wholesale market using BullionVault.

For me personally it gives that added security that you own the metal outright not just a certificate to say your investment is backed by gold or silver. There is also the option to quickly liquidate and sell your holdings 7 days a week 24hrs a day by just clicking a few buttons and paying a small commission. Home storing such a large amount of precious metals is not something I would feel comfortable doing myself as you aren’t insured if anything were to happen.

Having said all that, I hope you have found this guide helpful and if you’re not already a subscriber to the Profit Boss YouTube channel then please get subscribed for future upcoming content on the subject.

Thanks Chris Symcox