What You Need to Know Before Investing in Platinum Bullion

Platinum was first discovered by Spaniards when they were looking for gold, but they just ignored the platinum and saw it as a nuisance in their quest to find for gold. Along the way uses of platinum grew slowly.

Now platinum is one of the most in demand precious metal especially in the industrial aspect. Platinum is much more expensive than silver and gold, because it is rare, platinum has only a limited supply of around 7 million ounces a year.

When investing in precious metals before, people only put their money in silver and/or gold. Now people also invest in platinum. But investing in platinum is a lot more costly than silver or gold, so your pockets and wallet must be prepared. There are 3 ways to invest in platinum.

Buy Stocks: You can buy stocks of platinum producers. However, you should be aware that this is not the same as investing in platinum itself. The price of platinum could rise, but you may still lose money if the company is poorly managed.

Buy Mutual Funds or ETFs: There are now some ETFs and mutual funds that seek to replicate the price of platinum on the world market. This is probably the easiest way to invest in platinum, but be aware that these investment carry management excess fees that may reduce returns slightly.

Buy Physical Platinum Bullion: There are platinum bullion coins and bars that are made by a few countries each year. They usually come in denominations as low as 1/20 oz., with the most common being 1 oz coins. Generally speaking, the prices of these coins will have around a 5% mark up on its spot price.

Many people want to invest in physical platinum bullion, so here are some tips and advice if this sounds like you.

• First and for most you have to decide if you want to invest platinum in coins or in bars. If you have a small budget then I suggest you take the coins, but if you have a larger one either coins or bars will do. Keep in mind coins are more liquid.


• Second you have decide if you are going to buy online or off. Online has the advantage of lower prices but an increased risk of fraud. Off-line you can be more sure of what you are buying but you generally pay a higher price.


• Finally, you have to pick a place to store your platinum coins or bars. If you have a small amount you can probably get away with a safe at home. However, if you have a significant amount look into renting a safety deposit box. Just remember, that these costs will eats away at your returns.

Making an investment for you and your family’s future is good but you just have to see to it that you are investing on the right investment. Precious metals are a good investment only if you know how to invest in them properly.

Source by Gordon H. Smith

What You Need to Know Before Investing in Platinum Bullion