Buying Platinum as an Investment


Previously we have discussed buying gold as part of your investment portfolio. Today we will talk about the benefits of buying platinum as an investment and how to purchase it. All precious metals have their advantages and disadvantages, but platinum is underrated as a precious metal – or at least overlooked when compared to gold (and silver). 

Buying Platinum as an Investment

Why should you buy platinum as an investment? There are several very good reasons. 

First, platinum is quite a rare and useful metal – much rarer than either gold or silver. Only a few countries mine it in significant amounts, and much of that is purchased by either the jewelry, medical, electronics, or automotive industries. 

Along with palladium, platinum has frequently been used to make catalytic converters because it has a high melting point and high resistance to corrosion. As the price of palladium increases, platinum becomes more in demand for this purpose. 

Many people purchase precious metals like platinum as a hedge against inflation which is of real concern right now. During times of economic uncertainty or crisis, precious metals tend to hold their value much better than most fiat currencies. Platinum does fluctuate in price more than gold or silver do, so it’s easier to purchase at a lower price and then hold it and watch it appreciate in value. 

Most investment professionals recommend diversifying an investment portfolio, and buying precious metals like platinum can give it a robustness when stocks are going down in value. This can help to mitigate risk and potentially increase returns over the long term.

How Do You Invest in Platinum? 

There are several ways to invest in platinum, with pros and cons for each type of investment. Professional investors buy shares of mining stocks or speculate on platinum futures and options based on where they see the platinum market going. Both of these options are higher risk, and we do not recommend them if you are not an experienced investor in the futures market. 

A second option would be to invest in platinum ETFs. An ETF is an investment company (Exchange Traded Funds) that purchases physical platinum and then stores it in secure vaults. They sell shares of their stock of platinum. In purchasing a share, you will never take physical possession of that platinum, and you will have to pay a management fee to the ETF which can add up over time, but you will not have to worry about storing it as that is the ETF’s responsibility.

Finally, you can buy physical platinum coins or bullion from a trusted coin dealer like Grand Rapids Coins. You will take possession of the coins which you will then have to store securely at home, in a safety deposit box, or elsewhere. This is a hard asset that is easily transportable, and it’s also outside of the financial system, which appeals to investors who don’t like their investments to be tracked.  

Physical platinum is available in a number of forms, from 1/10th-ounce rounds to 10-ounce bars. Usually there is a small premium over spot price in the purchase, but once you own coins or bullion you will not have to pay a management fee like you would have to with an ETF. 

Should You Buy Platinum as an Investment? 

There are always risks associated with any purchase of precious metals. It’s important to buy platinum only through a reputable dealer. There are many unscrupulous people out there who take advantage of new investors or coin collectors. Additionally, the price of platinum does fluctuate based on economic conditions and supply and demand, so you need to be aware of this. Please do your research before you purchase.

At Grand Rapids coins we are happy to discuss coins and precious metals investments with you and take the time to make sure you find what you are looking for. We ship to customers nationwide, but locally you can visit our Rockford location if you would prefer to avoid shipping through the mail. Call us at 616-884-5048 to make an appointment to talk with us in person today. 

Ben Soldaat

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