The Real Reason To Hold Precious Metals

Investors often look down upon precious metals. Investors need to understand that gold and silver offer a unique value proposition in a portfolio. This is the real reason to hold precious metals.

Many people look at investing in precious metals as being non-productive. They do not pay a dividend. They likely won’t go up compared to investing in the stock market or other types of investments. While that is true, that is not why you want to hold precious metals.

“Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants - but debt is the money of slaves.” - Norm Franz

“Gold is money. Everything else is credit.” - J.P. Morgan

Recommended:

• 5 Consequences Of Celebrity And Social Media Influencer Culture

• The Case Against College (Part 7)

• Four Types Of Debt You Didn’t Know Existed

• Four Types Of Investments To Increase Your Net Worth

How Investing Is Usually Marketed To People

Investing is usually marketed to people as a way to get rich. You are told that by investing in the stock market (a form of paper investing), you can get rich over time if you invest wisely. You will then usually be shown charts of how the stock market continues increasing. If you had invested in x stock in x year, you would have gained a large percentage. This is a way to hype and sell people to get into the stock market.

There is a difference between always chasing the latest trend in the stock market in the hopes of instantly becoming rich and investing in the stock market for wealth preservation. The first is what was seen with stocks like AMC and GameStop. Emotions and a market frenzy drove people. The second is driven by reason, strategy, and understanding what you buy.

The stock market is investing in paper money. It is investing in your currency. While it is good to invest in the stock market, the reason to hold precious metals is for the opposite reason.

Dollar Devaluation

The dollar has lost nearly 97% of its value over time. That means that the currency is worth less. Your dollar used to be able to buy more with it. That is why your grandparents or parents would say, “Back in my day,” we could get a burger for ten cents. We could see a movie for a few bucks. We could buy groceries to feed the family for under a hundred bucks, et cetera.

For an analogy, you can think of inflation as the sponge and currency devaluation as the water that soaks the sponge. Inflation expands once it is filled with water. Currency devaluation is needed to do this, which is the water. Some people may only notice that the sponge becomes larger without recognizing that the water or currency devaluation is the source of enlarging the sponge. Central banks do currency devaluation through quantitive easing. Quantitive easing is simply a fancy way of saying an increase in the money supply.

Central banks are responsible for creating inflation which lowers your standard of living.

Where Can I Buy Precious Metals?

You can buy from your local precious metals store. You can also purchase precious metals online. Some of the places online are:

• Money Metals Exchange

• JM Bullion

• Your local gold and silver precious metals shop

This brings us to why it is important to hold precious metals.