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Investing in Platinum

If you were paying attention to “The Royal Wedding of 2018”, a.k.a. The marriage union between Prince Harry and Meghan Markle, you may have caught a blip about the Platinum wedding band that Markle had fashioned for her husband.

The use in jewelry, from simple to the lavish, is just one of the many reasons why Platinum has taken a favored spot among investors who wish to diversify their investment portfolio with the rare silver-white precious metal. Similar to palladium, Platinum is utilized as a catalytic converter in automobiles and accounts for nearly 50% of its commercial demand. Other market sectors, such as electronics and the medical industry, value its conductivity and chemical inertness.

Investors should take the time to understand what it is they wish to achieve in the long run by diversifying their portfolio with this metal. It might be worth taking a look at the spot price over the last decade.

In 2008, the spot price per troy oz. was just below $2,100 – a considerable increase from the mid to high $300’s in 1998. Investors during this period would have been ecstatic with their choice, but then came The Great Recession of 2008, quickly carving down their profits by reducing the spot price to a little over $800. Source: APMEX

Fast forward another ten years, and the metal regained some of its former price value it enjoyed in the early 2000’s, but then receded down to hover between the mid to low $900s in 2018.

It is possible that the metal may enjoy the former glory of the price the market entertained in the early years of the 21st century, but investors will have to play the long game if they wish to profit from a price increase. They would be wise to consider other metals, such as palladium, which is taking up the demands of the industry and enjoying the market favorability that Platinum once commanded.

By no means, is Platinum out of the picture, but careful research must be conducted on the part of the investor who is thinking about placing their money in the stocks of mining companies and futures market.

Exchange-traded funds, or ETFs for short, offer an alternative by allowing exposure to the market via indirect ownership of the metal. They function as common stock and can be bought and sold on a stock exchange.  And because they behave like a common stock, it is much easier for the average investor to make sound decisions based on their current knowledge and understanding of the stock market.

In summary, Platinum continues to be a stable investment and is worth a closer look by those who wish to diversify their portfolios with precious metals along with the historical standards such as gold and silver.

Tim Schmidt

A Florida-based Entrepreneur, Author, and Life Hacker, Tim Schmidt decided to take control of his retirement portfolio several years ago by setting up a self-directed IRA. This blog shares his thoughts and opinions on the top of retirement and investments. You can follow his career and travels on his Official Website as well as on his Instagram page.