Are precious metals worth investing in?

In troubled times, to survive the trillion dollar meltdown, the casual investor should be forewarned that not one financial expert can rationally describe or steer you in the right direction. That is within any market, including gold and silver investments. It may look good on paper, but so did the hot financial product of days past i.e. mutual funds.

The one thing to realize about these metals is that they are in a position for safety and perhaps much profit if one follows the age old rule to PHS (purchase low, hold and then sell high). Basing investment decisions on that adage and even more so during volatile financial happenings is considered sound practice.

With law of gravity proven by English physicist, Isaac Newton in 1666, what goes up must come down. That simplistic statement, whether or not it pertains to commodities prices, should help heed warnings for a quick fix in difficult economic times.

The prices for precious metals soared following the Great Recession. One reason for the price surge was fear of inflation per Forbes magazine. Nobody knew how long those high prices would last, especially as monetary and economic conditions change. Nevertheless, precious metals such as gold and silver are purchased by serious investors when a sudden price decline occurs and presents a price entry point.  

It is hardly surprising that a problem with investing in precious metals is when cash strapped investors sell while global economies are declining or unstable. This makes long-term investors nervous. Moreover, this scenario will cause the prices of precious metals once again take a nosedive. 

The novice or recent investor, who plans to buy at the present highs for a quick fix of a financial windfall will wind up with an investment worth much less than purchased. Don’t be short-sighted by investing in gold and silver at the present highs. The circumstances are similar to the over inflated value of homes across the nation that are now worth less than their outstanding mortgages.

Patience is the key, but since prices advanced at a rapid record due to heavy buying, an opportunity may have already been missed. Even though investors are turning to gold as a safe haven due to perceptions of a bleak global economic outlook, the economy is starting to show signs of recovery. Furthermore, in 2013 gold prices dropped substantially, perhaps in anticipation of economic improvement.

As the economic environment and market events recovers, another reason will exist for the price of precious metals to decline. Holding on to cash for now and waiting until the next turning point to invest in precious metals may be an effective method.

In any case, sticking to an investment strategy and not allowing the ups and downs of pricing to trigger emotional decisions is wise. There is never a clear cut answer in the world of investments, even when the global economy gets itself back on an even keel.