Precious metals have been characterized as the safe asset par excellence that investors turn to when financial market fluctuations cause concern and during 2020, they showed a positive trend that has attracted investors of different categories, but what are the reasons? For investing in precious metals is beneficial.
For years, investing in precious metals has been presented as an almost safe bet for investors seeking to diversify their investment portfolio gold ira. Although its profitability is not 100% guaranteed since they are affected by market fluctuations, precious metals are an investment strategy to take into account, since their behavior has recently pointed upwards.
Most common precious metals: gold and silver
Gold and silver are normally referred to as precious metals because they are the most common both at the investment level and at the application level. During 2020, gold had a positive year that ended with a rise and in the case of silver, this precious metal stood out considerably.
Although silver did not surpass gold in terms of growth, in terms of revaluation it was positioned at more than 40%, after stable and sustained growth.
This growth has caught the attention of a significant number of investors seeking to diversify their portfolio with a viable option, especially in times of turbulence in the equity markets, since precious metals present less volatility compared to other assets.
For those people who are new to the world of investments, the question probably arises: Why invest in precious metals? There are many answers to this question, but its importance is reflected in the following 3 reasons:
- Precious metals like gold and silver are a form of global money that can be traded anywhere in the world. This offers the possibility of liquidity without limitations of countries, currencies, among others.
- Its applications are extensive, which increases the demand for them and increases their value.
- They are safe assets. This term refers to the fact that in times when the market is in uncertain or unstable phases, these assets are capable of maintaining or increasing their value.
The pandemic and precious metals
The uncertain times that humanity is experiencing have impacted the financial market, leading investors to seek a refuge asset that gives them a higher level of security and tranquility.