Gold, Silver, and More: Metals as Investing Options - dummies

Gold, Silver, and More: Metals as Investing Options

Investors that incorporate metals into their portfolios often are able to generate significant returns. Here are the major metals that may make up a profitable part of your diversified investments:

  • Gold: Gold is perhaps the most coveted resource on the planet. For centuries, people have been attracted to its quasi-indestructibility and have used it as a store of value. Gold is a good asset for hedging against inflation and also for asset preservation during times of global turmoil.

  • Silver: Silver, like gold, is another precious metal that has monetary applications. The British currency, the pound sterling, is still named after this metal. Silver also has applications in industry (such as electrical wiring) that places it in a unique position of being coveted for both its precious metal status and its industrial uses.

  • Platinum: Platinum, the rich man’s gold, is one of the most valuable metals in the world, used for everything from jewelry to the manufacturing of catalytic converters.

  • Steel: Steel, which is created by alloying iron and other materials, is the most widely used metal in the world. Used to build everything from cars to buildings, it’s a metal endowed with unique characteristics and offers good investment potential.

  • Aluminum: Perhaps no other metal has the versatility of aluminum; it’s lightweight, yet surprisingly robust. These unique characteristics mean that it’s a metal worth adding to your portfolio, especially as it’s the second most used metal (right behind steel).

  • Copper: Copper, the third most widely used metal, is the metal of choice for industrial uses. Because it’s a great conductor of heat and electricity, its applications in industry are wide and deep, which makes this base metal a very attractive investment.

  • Palladium: Palladium is part of the platinum group of metals and almost half of the palladium that’s mined goes towards building automobile catalytic converters. As the number of cars with these emission-reducing devices increases, the demand for palladium will increase as well, which makes this an attractive investment.

  • Nickel: Nickel is a ferrous metal that is in high demand because of its resistance to corrosion and oxidation. Steel is usually alloyed with nickel to create stainless steel, which assures that nickel will have an important role to play for years to come.

  • Zinc: The fourth most widely used metal in the world, zinc is sought after for its resistance to corrosion. It is used in the process of galvanization, where zinc coating is applied to other metals, such as steel, to prevent rust.