According to a recent Bank of Ireland study, a cohort of people became “accidental” savers during the Covid-19 crisis. Many of these people intend to continue saving once the restrictions are lifted. Perhaps in part due to an economic uncertainty brought about by the pandemic.
Despite rising savings rates and the current low-interest rate climate, the research shows that investment awareness is lacking. Only 23% of respondents said they have enough knowledge in this area to make the best decisions, and 86% said they are afraid of losing their money.
For those of us lucky enough to have built up some pocket money during this crisis, let’s take a look at some ways you can choose secure and easy to understand investments. You don’t have to be a stock market expert to make some strategic decisions to grow your stockpile. At all levels of expertise, it’s possible to make some strategic, long-term investments to help secure your future.
The current thinking on the market’s behaviour after Covid-19 is that there will be an initial bounce. The economy’s reopening could be comparable to the roaring 1920s in America. A period when the country experienced unprecedented growth and spending. Consumer price inflation requires three factors: too much liquidity, chasing, and a scarcity of goods. The only thing lacking right now is the chasing. Once the vaccine hits a large enough portion of the population, the chasing of products and services will pick up.
In key economic sectors, demand could outstrip supply. Of course, this would be temporary, but it is part of the development of a new economy with less foreign trade and a greater focus on homemade goods and products. Could precious metals be the tried-and-true inflation shield for Irish investors in the coming new age of spending and inflation?
Precious Metals; Why They Are Always a Savvy Bet
Whether you’re a savvy investor with a strong and diversified portfolio or you’re new to the game and are looking for a way to make use of your pandemic savings, precious metals are a very solid investment.
Many banks and hedge fund managers try to steer people towards stocks and bonds in order to offer a steady stream of income. However, in a market where long-term stability isn’t a guarantee, this might not be the way to go. Despite the presence of more modern, higher-yielding assets, precious metals appear to defy logic, attracting investment from around the world and remaining a valuable commodity.
Precious metals are a great long-term investment because of their intrinsic value. Their worth as a dependable and secure store of wealth is reinforced by the fact that they generally appreciate (rise in value) over time. Although paper currencies lose value over time as more money is printed, gold, silver, and platinum remain scarce.
Despite the widespread use of unbacked paper currencies, precious metals are still the ultimate symbol of capital. It’s no surprise that many banks and governments around the world aim to keep a large portion of their assets in the form of gold bullion. There is also the fact that people, even investment novices, understand their value better than stocks.
Gold has always been a costly, but reasonably stable investment due to its scarcity and perceived elegance. With the exception of a few sporadic periods, wild spikes in the price of gold are rare.
Its main appeal, aside from its apparent prestige, is that it protects the investment portfolio from inflation. Its value remains stable while other assets fluctuate. So, it’s a common investment for those looking to protect a portion of their wealth for the long term.
Furthermore, its reputation as a ‘safe haven’ makes it a common investment during periods of economic turmoil; when trust in banks and other investments is poor, precious metals like gold, silver, and platinum become attractive alternative assets. Precious metals have consistently shown their capacity to withstand deflation.
Silver mining companies look extremely promising on a fundamental basis in 2021. Often known as the “poor man’s gold” since it is the less expensive of the two precious metals, it’s still a relatively stable long-term investment. Several factors influence the price of silver:
Supply and demand are important elements in determining the price you pay for any financial item. On the supply side, there is a limited supply of the world’s silver. As a result, supply is constrained by what is already in circulation as well as what is yet to be mined. Demand is influenced by a variety of things. The diverse uses of silver, for example, have a significant impact on industrial output.
Industrial applications accounted for roughly 56 per cent of overall silver demand in 2019, according to reports. Batteries, photography, solar energy, touch screens, 3D printing, engines, polymers, semiconductors, and other industrial applications are only a few examples. In addition, the commodity is employed in 5G technology. Although this technology is still being implemented, the Silver Institute believes that it will result in an increase in silver demand.
Additionally, silver isn’t just used in the medical industry to create high-tech medical machinery. It also works as an antibiotic and a biocide; the metal has been used to prevent the growth of dangerous germs and target bacteria without harming mammalian cells.
Silver prices are usually pegged to the US dollar. When the US dollar is weak, the price of silver usually rises. The same can also be said of gold. The price of silver tends to fluctuate in lockstep with gold prices, however, this is not always the case. In general, when the price of gold rises or falls, so will the price of silver. Silver, however, can be much more volatile than gold because it’s the smaller market of the two.
How Irish Investors Can Invest in Precious Metals
There are a variety of ways to invest in precious metals nowadays. Investors have been purchasing physical gold, silver, and platinum for years. However, there are now other options called ETFs. An exchange-traded fund, or ETF, is a fund that trades like a stock on a stock exchange, allowing it to be purchased and sold at any time.
Both have advantages and disadvantages, but we agree that purchasing physical bullion is a much safer way to invest in precious metals. Particularly if your primary motivation for purchasing gold is to use it as a stable, long-term investment.
With Goldcore your silver or gold is safely stored on your behalf in a professional high-security vault that keeps your investment in your hands. This offers you the assurance that the safety of your money is not reliant on the performance or stability of a bank or other company. Thereby fulfilling the exact reason you would have chosen to invest in a physical commodity with an intrinsic value rather than put your money in a bank or invest in shares or other financial instruments.