These days, more and more people are becoming interested in precious metals investments, but why? Today, we’ll talk about why so many investors are starting to look into precious metals, how they can help protect against losses, we look at the best money metals exchange review and show you how to start a precious metals IRA. So, let’s get right to it.
Why Investors Are Starting To Look At Precious Metals
Any time the market seems like it can’t sustain a positive rate of growth, major investors start to look to safe haven investments like gold, silver, and platinum as ways to protect themselves against losses. Historically, any time the stock market experiences long term losses we see gains in the value of precious metals. So, by using precious metals as a portion of your portfolio, it’s possible to protect against silver depletion.
But The Market’s Great, What Losses Are We Talking About?
I can’t argue that. For the last several years, we’ve been in the midst of a bull market; where stock values have been increasing almost every day and records have been broken several times in the last year. However, that in itself is creating a new problem. Stock valuations are growing at a rate faster than corporate earnings. To get an idea of whether or not the market is sustainable, I look at the Schiller PE ratio which compares stock prices to corporate earnings. Today, the Schiller PE is at 26.5; while in sustainable markets, that ratio is generally around 16.
Aside from the Schiller PE ratio, there are other areas that are really concerning. First off, let’s take a look at oil. Over the last several months, the price of oil has fallen dramatically; losing more than two thirds of its value. OPEC had a meeting Thursday to address the issue, and because they’d like to see shale production in the US slow down, they’ve decided not to decrease oil output. As a result, shale companies in the United States will struggle and many will close their doors; ultimately leaving thousands of people unemployed. This has the potential to spark a selloff in the market.
Finally, geopolitical threats are also a big concern these days; and there are a couple concerns I’ve been watching closely. First and foremost the terrorist situation with ISIS and other groups has gotten to the point that President Barak Obama authorized sending 1,500 more American troops to join in the fight. Aside from terrorist threats, Russia and Ukraine are still at odds over the Crimea Peninsula and Western sanctions are still active against Russia as a result.
How To Start A Precious Metals IRA
As mentioned above, precious metals can be a great hedge against losses in the stock market.Starting a precious metals IRA is a relatively simple, three step process at Lear Capital. Here are the steps…
- Open An Account – First you’ll need to open an account with a broker like Goldco Precious Metals.
- Fund Your Account – Now that your account is open, make your first deposit.
- Create A Plan For The Future – A good broker will help you with deciding how you’re going to invest for the future.
There are also tons of other precious metals investment vehicles. It may be a good idea to speak with your financial advisor to discuss how gold can act as a hedge in your portfolio.