Investing in platinum coins is becoming popular as people learn about the importance of platinum as a precious metal. However, if you are driven to this decision by observing a co-worker or a relative, you must reconsider. Although the best way to invest in platinum is through coins, is it for you?
Before thinking, “How do I invest in platinum?” read this blog post as it will help you weigh your decision with your current situation and goals in the context.
Things to Consider Before Investing in Platinum Coins
Investing in platinum coins or any other commodities is a risky bet. While gold and silver seem quite safe, the market is still volatile, which increases the risk.
You must consider additional factors before investing in platinum, as this precious metal is rarer than its counterparts.
Your Level of Experience as an Investor
Your experience level as an investor is crucial in deciding whether platinum will be a lucrative investment. Experienced investors are well-versed in investment methods and know when is the right time to purchase and sell. Most investors choose platinum for long-term investments to hedge against potential inflation or safeguard themselves during economic crises.
The platinum market depends upon the geopolitical conditions of Russia and South Africa, the two global hubs of platinum. Since riots from labor organizations are common in South Africa, its volatile political conditions cause platinum mining to stop. Hence, the prices fluctuate globally, making platinum a risky investment for beginners.
Investors with years of experience know which sources to follow and the decisions to make during a political crisis in these countries. Since they mainly focus on long-term investments, they don’t gear up into action mode over massive short-term fluctuations.
Risk Tolerance
Platinum is used extensively in the automobile industry; that’s the main demand market for platinum. The electronics and jewelry industries also have a high demand for this precious metal due to its durability.
Platinum is also harder to mine than other precious metals since it’s deep inside the Earth’s core. The supply of platinum is, therefore, more limited than its counterparts, such as gold and silver. Hence, demand and supply are crucial to smoothly run the platinum market, which can keep the prices of platinum raised for more profits.
In contrast, due to the issues in demand and supply of this precious metal, the risk of investment increases. Platinum’s supply drops in value with the dollar, which ultimately spikes the commodity’s price. However, if reversed, the crashing prices of platinum might increase the risk.
How much risk you can tolerate with your investments depends on your personal preference and investment portfolio.
Investment Time Horizon
The volatility of the platinum market makes the investment worthwhile only if it’s long-term when you consider the added tax factor. Short-term holdings mainly refer to investments that are less than a year long. Such investments, when sold, are subjected to normal income tax on the profits.
In contrast, long-term investments, i.e., those longer than a year, create profits on which you must pay capital gains tax. Depending on your income, this tax lies somewhere between 15% to 20%.
Hence, it’s essential to note whether investing in platinum for the short term only to pay exorbitant tax on its profits is worth it. Experts mainly recommend platinum investments for those who can bear the risk of short-term price fluctuations. If you need fast profits from your platinum bullion, it’s not a suitable investment.
Financial Standing
Do you have a strong investment portfolio with diverse investments? Or do you have a strong financial backbone? If so, investing in platinum coins will be wise as it adds variety to your investments.
However, this field might not suit you if you plan on risking it all through platinum for fast returns.
You can also consider other investment options to indirectly invest in platinum, such as a precious metal fund or a natural resource fund.
Ways to Invest in Platinum
If you regularly ask yourself, “How do I invest in platinum?” Here are a couple of suitable answers for you.
Platinum Bullion
The best way to invest in platinum is by purchasing physical coins and bars. However, platinum’s weight, greater than other precious metals, makes the delivery of platinum bullion tough. If you purchase platinum coins and bars from a reliable metal exchange service, they can get you your product without hassle.
ETFs and Stocks
Exchange-traded funds and stocks are some other common ways to invest in platinum. You can choose a platinum mining company and invest in it, as their stock prices aren’t subjected to extreme volatility.
Platinum ETFs are also another way of exposure to the platinum market. You don’t have to own physical platinum to invest in platinum ETFs. Hence, through this option, you save physical storage costs and insurance money on platinum.
Orion Metal Exchange Offers Precious Metals at Competitive Rates
The best way to invest in platinum is through buying bullion such as platinum coins and bars. However, you must ensure that the metal exchange service you choose for this purchase is reliable and safe.
Orion Metal Exchange is an esteemed precious metal investment company that offers platinum, gold, silver, and palladium coins at competitive prices. Moreover, the gold and silver investment company is an excellent partner for beginners as its experienced experts guide their clients comprehensively. Hence, whether you need to consult an expert or exchange your existing commodities with platinum, Orion Metal Exchange is here.
If investing in platinum coins is your ultimate decision, you can check out their extensive collection. You can also contact them for more information.
