Investing in gold or silver is a good way for many people to diversify their accounts. These are time tested treasured commodities. Gold was often used as money in ancient times. Later it was used as collateral for a nation's wealth. Silver was also used as money in the past. Today it is the most useful industrial commodity after petroleum. Physical gold and silver are limited resources. There is just enough investment grade gold for each living person to own just a third of an ounce. Investment grade silver is even rarer. There is only enough for everyone to have a 1/14th of an ounce.
When considering gold or silver, the key is to understand the benefits and risks of each type of investment. You must first decide whether you will be working with a long term investment or a short term investment. You must also decide if you are looking at this investment to simply protect your wealth or if you wish to make any sort of profit on your undertaking.
There are a number of ways that that you can own precious metals. The most conservative strategy is to buy physical gold or silver. Investment grad metal comes as either coins or bars. Each coin or bar will be hallmarked for quality. It will also cost a small amount more then the spot value. If buying metal, you must also decide if you will take delivery of the items yourself or if you will have it stored in a place like a bank vault for safekeeping. Owning it physically also has a different tax status then owning precious metals in paper form.
One way to get exposure to the art of trading precious metals is to own a paper alternative to the physical product. Paper gold and silver is known as the ETF. Basically, the value of the paper will track the value of your chosen precious metal. One of the issues with owning an ETF is that you own a paper that gives you the right to sell that paper at the value of gold or silver but it is not actual ownership of any particular object. It is also an asset that will diminish. Each year the value of the investment will decrease by...