Precious metals provide exceptional security against inflation. They have intrinsic value, carry no credit risk and cannot be inflated. This means you can no longer print from it. In addition, they offer unique “upheaval insurance” against politico-military or financial upheaval.
From an investment theory perspective, precious metals also demonstrate a negative or low correlation to other investment classes such as bonds and stocks. This means that even a small ratio of precious metals in a collection reduces both risk and volatility.
What are the advantages of investing in precious metals over stocks?
Investing in precious metals has some advantages over investing in stocks. This includes a hedge against inflation, intrinsic value, ease of purchase, no credit risk, high levels of liquidity, and diversity in a portfolio.