In today’s world, we’re witnessing an increasing interest in investments related to precious metals. But what’s the reason behind this trend? Today, we’ll delve into why investors are showing a keen interest in precious metals, discuss their role in safeguarding against potential losses, explore the best metal exchanges, and guide you on starting a Precious Metals Individual Retirement Account (IRA). Let’s dive right in.
The Rising Appeal of Precious Metals Among Investors
Whenever signs of unstable growth surface in the market, investors tend to resort to safe haven investments such as gold, silver, and platinum to shield themselves from losses. History indicates that the value of precious metals usually increases when the stock market suffers long-term losses. Thus, incorporating precious metals into your portfolio could potentially offer an armor against any depreciation.
You might ask though, “If the Market is Thriving, What Losses Require Shielding Against?”
Indeed, recent years have witnessed a bull market, with stock values on a steady rise and record-highs created repeatedly within the last year. Yet, this could potentially breed a new concern. The growth rate of stock valuations has outpaced that of corporate earnings. As a measure of the market’s sustainability, I consider the Schiller PE ratio that juxtaposes stock prices with corporate earnings. Presently, this ratio sits at 26.5, while for markets enjoying sustainability, it normally hovers around 16.
Besides the Schiller PE ratio, there are other alarming factors to note. Firstly, let’s discuss oil. Over the past few months, oil prices plummeted, losing over two-thirds of their value. During a recent OPEC meeting, the decision was made to continue the same oil output, intending to slow down shale production in the American market. Consequently, many U.S. shale companies may face dire consequences and be forced to shut down, leaving thousands jobless. This scenario could potentially ignite a market selloff.
Adding to this, geopolitical threats pose another pressing concern. Specifically, the escalating terrorist conundrums led by organizations like ISIS are reaching a point where additional U.S. troops were deployed as per President Barak Obama’s order. Moreover, the ongoing Russia-Ukraine conflict over the Crimea Peninsula and imposed Western sanctions against Russia further complicate matters.
Steps to Initiate a Precious Metals IRA
As previously stated, precious metals serve as a promising shield against stock market losses. Launching a precious metals IRA is a straightforward, three-step process at Lear Capital. Here’s your step-by-step guide:
1. Open an account with a reputable broker like Goldco Precious Metals.
2. After opening your account, make your initial deposit.
3. Collaborate with your broker to devise an investment strategy for future growth.
Apart from IRAs, numerous other investment methods related to precious metals are also available. Consulting your financial advisor might be beneficial to uncover how gold can act as a protective buffer in your portfolio.
