Today, I’m thrilled to share with you the little-known perks of investing in silver, platinum and palladium. This is a subject I rarely see covered — yet a number of my wealthy former clients hold at least one of these metals in addition to gold.
Gold’s sister metals are the height of unconventional wealth. And you’re about to become one of the special few who understand exactly what makes them such attractive investments.
Now, you may be wondering… If gold is so popular, why bother with anything else?
The answer: diversification.
Don’t make the mistake of lumping all precious metals together.
Gold is a monetary and jewelry metal. Silver has monetary and jewelry uses, yes, but also industrial uses. And platinum and palladium are primarily industrial. This variety means prices move on each for different reasons.
Plus, there are vastly different supplies of these “other” metals. The scarcity (or relative lack thereof) also affects pricing.
This overview should help you understand these lesser-known assets so you can decide which best meets the diversification needs of your portfolio.
Silver has been around for thousands of years. Many of our modern names for money were coined — pun intended — from silver.
The word dollar, for instance, originated from a German word for a silver piece. And did you ever wonder why British money is called the pound sterling? Each piece originally weighed 1 troy pound, which was the equivalent of 240 silver, or sterling, pennies. The Indian rupee and the Spanish peso also get their names from silver.
The first thing to know about silver is there’s a lot more of it out there than gold. About 1.5 million tons of silver have been mined to date — compared with 200,000 tons of mined gold.
(Need a visual? That’s about six Olympic-size swimming pools full to the brim of silver, versus about two full of gold.)
Silver is an all-purpose metal: Like gold, it serves as money, a means of saving and a way to diversify your investments — all rolled into one.
Demand for silver in all sectors is strong and growing…
Silver is very versatile. It conducts heat better than any other precious metal. Silver is also the best conductor of electricity, making it highly useful in electronics and batteries.
Silver is also the metal most reflective of natural light. So in addition to making a sparkling jewelry and shiny silverware, it’s now being used in solar heating panels.
Before digital photography took over, silver nitrate helped advance the field of photography. Some old-school artists still use it to develop prints to this day, despite the popularity (and ease) of smartphones and point-and-shoot cameras.
Silver is also a known germ fighter. Its antimicrobial properties have been used to produce sweat-resistant clothing… It’s commonly used in water purifiers… And a bulk of medical equipment and hospital instruments are made of silver to prevent contamination and infection.
These diverse uses drive demand. And thanks to the slew of industrial uses, the price of silver is more prone to swings and economic cycles (and trade wars) than gold. But whether the price is up or down, the silver market appears fundamentally strong.
The price of silver is typically a lot lower than that of gold, which may make it easier to start investing in silver. It’s also safer to store silver in your home — the high price of gold translates to higher risk.
The world’s largest silver exchanges are located in London and New York. These two markets dominate global trading activity.
Platinum is even more rare and valuable than gold. In swimming-pool terms, the amount of platinum in the world wouldn’t even fill up one.
Platinum comes from the Spanish word platina, which means “little silver” in English. Platinum is found in an interesting cross section of countries around the world — the United States, Africa, Colombia and Russia — often in the company of other metals.
Platinum is the third-most-popular metal with investors after gold and silver. Demand is ruled primarily by industrial usage and seasonality. When people buy a lot of jewelry and cars around the holidays, platinum prices tick upward.
Platinum is used in a variety of industries…
Speculators who understand this niche market and can anticipate industrial demand love this metal — frequently, it turns faster profits than gold and silver.
Although platinum has a shorter asset history than gold or silver, it’s a solid investment because of its limited supply, high demand (especially from the auto industry) and, of course, intrinsic value.
If you want to trade in platinum, you could familiarize yourself with mining companies in South Africa… and track what’s happening with car and light truck manufacturing…
Or you could contact our partners over at Hard Assets Alliance. They make investing in precious metals — including platinum — a breeze. From valuation to storage, they’ve got you covered.
Palladium is the newest kid on the precious metals block. Often a byproduct of platinum mining, it’s actually 15 times rarer than platinum.
Like platinum and silver, palladium is an industrial metal most often used in dentistry, electronics and automobile production.
Typically, you’ll see palladium in bars or coins. Sovereign mints around the world strike coins, which keep their face value within their country of origin.
Private mints also strike palladium coins. The telltale sign of a privately minted coin is it doesn’t have a value designated on the face. It is not backed or guaranteed by anyone. The value is strictly in the weight and purity of the metal.
This Canadian Maple Leaf coin is an example of an easy way to hold palladium…
The price of palladium is heavily affected by current events, more so than the other precious metals. This can trigger the price to rise or fall substantially in a single day.
Demand for palladium has increased by almost 50% over the past few years — and supply deficits are predicted. If you already hold any palladium, watch the spot price closely to track the value of your investment.
And if you aren’t currently holding any of these precious metals, there’s no time like the present…
I recommend owning the physical metals — not just an ETF. Open a free account with Hard Assets Alliance and they’ll get you sorted, whether you want to invest in just gold, silver, platinum… or a little bit of everything.
To your wealth,
Editor-at-large, Unconventional Wealth
Steffi Baker is the editor-at-large of Unconventional Wealth. For the past 10 years, she worked with a small strategy consulting firm that dealt exclusively with wealth-management companies, helping them market themselves to ultra-high-net-worth clients.
Through this line of work, Steffi attended events in London and New York and hobnobbed with household names and international...