Asked by Anonymous

Why no one here talks about investments in precious metals? Is it an undervalued commodity?

PMs, particularly gold and silver(most especially billions and not etfs/certifixates), are money for thousands of years. They are also a commodity with intrinsic value that can be useful in the production of many products from electronics to healthcare materials. With a growing demand for automation, the opportunities and the potential for growth should be considered. Though it’s boring and slow, its value will never go to zero.

0
0
Share this
Answer this question
Add
Add
Select
Clear
Add
Write your answer

Answers (4)

Sort by:
Most Upvote
  • Most Recent
  • Most Upvote
  • Isaac Chan
    Isaac Chan
    Top Contributor

    Top Contributor (Mar)

    Level 6. Master
    Answered on 12 Feb 2019

    Precious metals belong to the asset class of commodities. In short, commodities are basic goods used in commerce that is interchangeable with other commodities of the same type and are most often used as inputs in the production of other goods or services. For example, silver is a commodity and since most silver mined or used in production are almost the same with each other, there can be little differentiation between them. Other kinds of commodities include crude oil, grains and even water.

    The almost uniform nature of commodity products lands itself in a very different investment product as compared to others. Although they are affected by demand and supply as with other investments, different demand and supply factors affect their prices at different intensities. They are also linked to another kind of asset class, known as Derivatives, where players in the commodity markets, such as Olam use such investment products to hedge their risks of commodity price hikes.

    Not many people may talk about such a form of investments on this platform because the factors affecting such investments are more foreign, and less accessible to new investors trying to make their first investments. It is unlikely that people don't talk about it here simply because commodities are undervalued.

    Comments (1)
    1
    0
    Share this
    • Question Poster
      Thanks for sharing
      12 Feb 2019
  • Luke Ho
    Luke Ho, Money Maverick at Money Maverick
    Level 6. Master
    Answered on 11 Feb 2019

    That's true. I don't think it's an undervalued commodity. I think its valued correctly now and it spent centuries being overvalued.

    It's meant to be a hedge but even in extreme worst times, a 5% gold hedge across 1997 to now doesn't have a particularly positive impact on a diversified portfolio. So the math tells me to be a skeptic...

    That being said, I'd love to have a gold bar in a safe. Polish it when times are down. My preciousss

    Comments (1)
    1
    0
    Share this
    • Question Poster
      Hahahaha that reference
      12 Feb 2019
  • Vineeta Sonone
    Vineeta Sonone, Financial Assistant at Multi Management & Future Solutions
    Level 3. Wonderkid
    Updated on 11 Feb 2019

    Yes, investment in precious metals is a very good idea. The things to consider are:

    • Demand for precious metals will never go down.
    • Precious metals offer easy liquidity. These can get us cash whenever needed.
    • Can help in diversifying investments.
    • Worldwide acceptance.
    Comments (1)
    1
    0
    Share this
    • Question Poster
      👍
      12 Feb 2019
  • Nicholes Wong
    Nicholes Wong, Diploma in Business Management at Nanyang Polytechnic
    Top Contributor

    Top Contributor (Mar)

    Level 6. Master
    Answered on 12 Feb 2019

    It is mainly used as a hedge maybe thats why people dont really talks about them.

    Comments (1)
    0
    0
    Share this
    • Question Poster
      True that
      12 Feb 2019