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Alabama Precious Metals is a company that specializes in precious metals such as gold and silver. They offer investors a way to diversify their portfolios through investing in these precious metals.
The price of gold has increased over the years due to its high demand from consumers around the globe. It has risen by almost 400% since 2009. This increase in demand has led to a rise in the number of companies offering precious metal investment opportunities.
Precious metals are considered safe investments because they don't fluctuate much in value. Gold and silver are also good options for those who want to invest in something tangible. Investing in precious metals is a great way to hedge against inflation and other risks. You can use it to protect your assets or even sell at a profit when you decide to cash out.
As an investor, you should consider your financial options before making any decisions. It would be best if you considered the pros and cons of each option so you can make the best choice for your situation. The following article will help you learn more about precious metal investment.
About Alabama Precious Metals
Products
The products offered by Alabama Precious Metals include silver rounds, silver eagles, silver maple leaves, and others. These products are available in 1 oz, 5 oz, 10 oz, and 100 oz sizes.
Owner
Alabama Precious Metals is owned by American Silver Eagle Bullion Inc., founded in 1987. The company offers precious metal investment opportunities to individuals and institutions. Investors have access to physical bullion bars and coins.
Rating
This company receives a rating of 3 stars out of 5 based on customer reviews. Based on the number of positive reviews, this company earns a higher star rating than most other precious metal investment companies.
Investing in Precious Metals: Pros and Cons
When you think about investing in precious metals, you may feel overwhelmed with all the information available. However, there are some things you need to know before you start looking into this type of investment opportunity. Keep reading to discover the benefits and drawbacks of investing in precious metals.
Pros
- Safe Investments – When you invest in precious metals, you put money into a product that won't lose value. This means you won't lose money if you invest in gold or silver. If you had invested in stocks, bonds, or another asset that could decrease in value, you would have lost money.
- Hedging Against Inflation – Precious metals do not change in value very often. Because of this, they are an excellent way to hedge against inflation. Inflation occurs when prices increase over time. If you invest in precious metals instead of using fiat currency (paper money), you will avoid paying higher prices for goods and services.
- Liquidity – Another benefit of investing in precious metals is that they are easy to sell. You can buy them at a physical store or use online exchanges. Once you have purchased the precious metals, you can easily convert them back into cash.
- Tax-Free Income –Investing in precious metals provides tax-free income. You won't have to worry about paying taxes on your earnings. Instead, you will receive a 1099 form from the IRS detailing how much you earned.
- Physical Possession – One of the most significant advantages of investing in precious metals over other investments is that you can hold onto the metal. With paper money, you cannot physically possess the coins or bars. When you own precious metal, you can take it anywhere and keep it as long as you like.
- Investment Opportunity – They provide an excellent opportunity to earn extra income. Many people invest in precious metals because they believe their returns will be greater than traditional investments.
Cons
- Investment Risk - While precious metals are reliable investments, they aren't risk-free. For example, you wouldn't get anything back if you bought gold coins and they were stolen.
- Price Fluctuations - Since precious metals are valuable commodities, their price changes frequently. If you invest in gold, you might see a massive spike in its value. Then, as soon as you sell it, the price drops significantly. This makes it difficult to predict which direction the market will move.
- Limited Supply - Only a limited amount of gold and silver is available. If you want to invest in these types of products, then you need to be aware that the supply is limited.
- Mining Process - The mining process used to create precious metals isn't exactly eco-friendly. It requires large amounts of energy and water, among other resources. Additionally, the production of these metals has been known to cause harmful effects on humans and animals who live near where the mines are located.
- Storage Costs - Investing in precious metals also comes with storage costs. Unlike paper currencies, you must store your coins and bars somewhere safe. You also need to ensure you don't lose any of your investment.
- Cost - Buying precious metals is more expensive than buying stocks or bonds. However, this cost doesn't include the initial investment. You'll need to spend some money upfront to invest in precious metals.
- Low Returns - Precious metals tend to fluctuate in value. Because of this, you're likely to earn less interest when you invest in these assets.
- High Maintenance - Although investing in precious metals may seem simple at first glance, it does require some maintenance. You'll need to purchase insurance for your items, keep them stored properly, and ensure they stay away from moisture and extreme temperatures.
- Limited Number of Exchanges - Most financial exchanges offer trading options for stocks and bonds. However, very few exchanges allow investors to trade precious metals.
- No Insurance Protection - Many people think owning precious metals protects them against inflation and economic downturns. However, this isn't true. Your savings won't protect you from losing all of your wealth during a recession.
- Lack of Liquidity - Another problem with investing in precious metals is their low liquidity. This means that you can't easily convert your investments into cash.
- Potential for Loss - When you buy physical precious metal products, you risk losing part or all of your investment. For example, if you own a bar of gold, you could lose it if the company goes bankrupt.
- Unpredictable Future Value - Even though precious metals aren't subject to the same fluctuations as stock prices, they still have unpredictable future values.
- Risky Investment - Investing in precious metals carries risks. These risks include theft, fire, and natural disasters.
