{"id":29695,"date":"2023-11-21T08:33:50","date_gmt":"2023-11-21T16:33:50","guid":{"rendered":"https:\/\/www.advantagegold.com\/?p=29695"},"modified":"2023-11-21T08:33:50","modified_gmt":"2023-11-21T16:33:50","slug":"stocks-vs-precious-metals-pros-cons","status":"publish","type":"post","link":"https:\/\/www.advantagegold.com\/blog\/stocks-vs-precious-metals-pros-cons\/","title":{"rendered":"Stocks vs. Precious Metals: Pros &#038; Cons"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Sometimes opposites attract.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Sonny and Cher. Martin and Lewis. Peanut butter and jelly.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Sometimes we need a little help from a friend to fill the gaps and complete the mission.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Deciding between an investment in stocks vs. precious metals may be a similar scenario.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The two are complete opposites, but they can be great complements. Owning precious metals in tandem with stocks may be just the pairing to help you achieve your investment goals.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We will look at both assets to get a better understanding of what they are, how you invest in them, and their strengths and weaknesses.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ultimately, we\u2019ll see if this odd couple can peacefully coexist\u2014or even thrive\u2014in your investment portfolio.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What Are Precious Metals?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Precious metals are rare elemental metals with high industrial and economic value.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since the times of ancient civilizations, people have valued precious metals for their beauty, scarcity, and industrial and practical uses.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Precious metals are malleable, conductive, and non-corrosive. For centuries, societies have used them in coinage and currency. The finest jewelry and adornments are fashioned from precious metals.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are eight precious metals. The four most widely known and used are the \u201cprimary metals.\u201d They are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gold<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.advantagegold.com\/approved-precious-metals\/silver-coins\/\"><span style=\"font-weight: 400;\">Silver<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.advantagegold.com\/approved-precious-metals\/platinum-coins\/\"><span style=\"font-weight: 400;\">Platinum<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.advantagegold.com\/approved-precious-metals\/palladium-coins\/\"><span style=\"font-weight: 400;\">Palladium<\/span><\/a><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Each is unique and has different uses.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Outside of jewelry and industry, investors own physical precious metals to anchor their portfolios.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Investors acquire physical gold, silver, platinum, and palladium in two ways:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Precious metals IRA<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Direct delivery<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">There are two ways to own precious metals in an individual retirement account:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If you are 59 \u00bd and own a 401(k), or if you own a 401(k) from a previous job, you may roll over that 401(k) to a <strong><a href=\"https:\/\/www.advantagegold.com\/approved-precious-metals\/\">precious metal IRA<\/a><\/strong>\u2014also known as a Gold IRA or Silver IRA.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If you already own an IRA, you can simply transfer it to a <strong><a href=\"https:\/\/www.advantagegold.com\/gold-ira\/\">Gold IRA<\/a><\/strong>.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Both the <a href=\"https:\/\/www.advantagegold.com\/gold-ira-investment\/gold-ira-comprehensive-guide\/what-is-a-gold-ira-rollover\/\">gold IRA rollover<\/a> and the IRA transfer are tax-free and penalty-free.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Gold and <a href=\"https:\/\/www.advantagegold.com\/blog\/what-is-a-silver-ira\/\">Silver IRA<\/a> function just like a typical IRA but give you the option of owning physical assets\u2014such as gold, silver, platinum, and palladium bars and <strong><a href=\"https:\/\/www.advantagegold.com\/approved-precious-metals\/gold-coins\/\">coins<\/a><\/strong>\u2014within the plan.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong><a href=\"https:\/\/www.advantagegold.com\/approved-precious-metals\/\">IRA-eligible bars and coins<\/a><\/strong> are among the finest in the world. They must meet IRS standards for purity, origin, and condition. For example, metals must be stored in an approved depository.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">All aspects of metals ownership are included in the self-directed IRA.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Direct delivery buyers (cash buyers) have the benefit of choosing any available bars and coins. There are no eligibility rules or restrictions. If a coin or bar is available and within your budget, you can have it directly delivered to your doorstep.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Direct delivery is easy. You choose what metals you want. Your account executive helps locate the pieces and sells them to you. Your assets are then insured and shipped to you.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s that simple.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What Are Stocks?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Stocks are a type of security that gives the holder a share of ownership in a company.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Companies sell stock to raise money and fund operations.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Investors buy shares of a company. The share\u2014or unit of ownership\u2014 entitles the stockholder to a portion of the company&#8217;s assets and earnings.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some companies issue different types of stock. The type of stock you invest in determines your dividend participation, your voting rights, and whether or when you may recoup your investment if the company goes bankrupt.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The two most common types are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Common stock<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Preferred stock<\/span><\/li>\n<\/ul>\n<p><b>Common stockholders<\/b><span style=\"font-weight: 400;\"> receive dividends\u2014a sum of money paid quarterly out of profits or reserves\u2014if a company chooses to pay them. Dividend payments are at the discretion of the company and determined by the company\u2019s needs.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Shareholders of common stock also get voting rights\u2014typically one vote per share\u2014at shareholder meetings.\u00a0<\/span><\/p>\n<p><b>Preferred stockholders <\/b><span style=\"font-weight: 400;\">have the right to receive dividends before common stockholders but retain no shareholder voting rights.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When a company performs well, its stock price increases and your shares increase in value.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Investors typically buy stock and hold it over a long period of time.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Stocks are speculative, and there are no guarantees in stock investing. Stock prices sometimes decline. If a company loses most or all its value, its stock becomes worthless. And your investment becomes worthless, meaning you lose your invested funds.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We have seen stalwart companies that have existed for decades hit turbulent times. We have witnessed companies become insolvent, their stocks turn worthless, and investors left with nothing but pieces of paper.\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/news.gallup.com\/poll\/266807\/percentage-americans-owns-stock.aspx\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Even with the risk factor, stocks are the primary method investors use to grow their funds and seek long-term financial security.\u00a0<\/span><\/a><\/p>\n<h2><span style=\"font-weight: 400;\">Pros and Cons of Investing in Precious Metals vs. Stocks<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There is no perfect investment. When choosing between<\/span> <span style=\"font-weight: 400;\">precious metals vs. stocks, it is important to understand what can accelerate your portfolio\u2019s success and what can doom it to failure.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Investing in Stocks: Advantages and Drawbacks\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Investors are drawn to stocks because of the following advantages:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Dividends<\/b><span style=\"font-weight: 400;\">. You can take dividends as extra income or reinvest them to purchase more shares of a stock.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Liquidity<\/b><span style=\"font-weight: 400;\">. Stocks are very liquid. You can buy or sell them\u2014at a transparent price\u2014with a push of a button.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Long-term growth<\/b><span style=\"font-weight: 400;\">. Stocks typically return higher yields than other speculative investments over the long term.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Some potential pitfalls associated with stock investing are:<\/span><\/p>\n<ul>\n<li><b>Volatility<\/b><span style=\"font-weight: 400;\">. Stock prices can have precipitous rises and collapses. They can be erratic and affected by a company\u2019s policies and procedures, not just the quality of a product.\u00a0<\/span><\/li>\n<li><b>Taxes<\/b><span style=\"font-weight: 400;\">. Accounting for gains and losses from stock investing can be complicated. It often takes paying a professional to mitigate losses and navigate tax consequences from gains.\u00a0<\/span><\/li>\n<li><b>Last in line. <\/b><span style=\"font-weight: 400;\">In case of a company\u2019s catastrophic failure, stockholders are the last to recoup their investment. They must wait for creditors, employees, and suppliers to get paid before any owners of the company receive any funds.<\/span><\/li>\n<li style=\"list-style-type: none;\"><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">Investing in Precious Metals: Advantages and Drawbacks\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Precious metals offer benefits that paper-based assets do not:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Diversification<\/b><span style=\"font-weight: 400;\">. Precious metals exist as a different asset class. They are non-correlated to the stock market and typically move opposite the market. When stock prices decrease, metal prices often increase. And vice versa. Precious metals give balance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Inflation hedge. <\/b><span style=\"font-weight: 400;\">As money printing dilutes the dollar\u2019s worth, inflation takes hold and drives up prices. Consequently, it may take more dollars today than yesterday to purchase goods and services. Precious metals are priced in dollars, which helps retain their value. Because their price increases alongside other goods, it therefore takes more dollars to buy precious metals. That means more money for you when it comes time to sell.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tangible asset<\/b><span style=\"font-weight: 400;\">. Precious metals are real and tangible\u2014you can hold them in your hand. They have been around nearly as long as the Earth. Some have had value since the earliest civilizations, and they will probably always have value.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The drawbacks of investing in precious metals include:<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b>No interest or dividend. <\/b><span style=\"font-weight: 400;\">Bars and coins do not generate interest or pay a dividend. Their value is rooted in supply and demand, which geopolitical and economic factors can affect.\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Costs<\/b><span style=\"font-weight: 400;\">. Precious metals have built-in acquisition and maintenance costs. There are fees to establish and maintain an IRA. Like any other product, precious metals sell at a profit. Direct-delivery owners may encounter fees when storing, insuring, and securing their metals.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Early withdrawal penalties<\/b><span style=\"font-weight: 400;\">. Gold IRA owners must abide by the rules of the IRS. <a href=\"https:\/\/www.irs.gov\/retirement-plans\/hardships-early-withdrawals-and-loans\" target=\"_blank\" rel=\"noopener\">With few exceptions, funds must remain in the plan until you turn 59 \u00bd<\/a>. Unapproved early withdrawals are assessed a penalty and taxed as ordinary income.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Choosing Between Precious Metals and Stocks\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The decision of investing in precious metals vs. stocks boils down to having a thorough understanding of where you are and where you want to be as an investor.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are a few key steps to consider taking as you weigh your decision.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Assess Your Financial Goals\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Know what you want your financial future to look like. Be realistic and reasonable, but be aspirational. Plan for the long term, and get there by stringing together your short-term accomplishments.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Determine How Diverse Your Portfolio Is\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">What do you own in your portfolio? Is it filled with different stocks? If not (and possibly even if so), you may need to diversify.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Even if you own different stocks, all from different sectors of the market, they are still all stocks. They are all susceptible to the same general market conditions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Consider owning physical metals in your portfolio to add a tangible, non-correlated asset.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Consider Market Trends\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Timing is everything.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the internet age, we have great access to information. Use it. A well-informed investor may get in early and ride the wave upward longer.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Conversely, information may indicate that it\u2019s time to liquidate a position and move into a counter position.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Be informed. Stay fluid.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Get Started with Investing\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Your first step should be researching and finding reputable stockbrokers and precious metals dealers.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The stockbroker landscape is filled with names we\u2019ve heard through commercials for decades. Find one whose investment theory aligns with yours. Check their pricing and commissions. If you choose a personal broker, make sure to assess their bedside manner and ask questions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your precious metals should come from a highly reputable <a href=\"https:\/\/www.advantagegold.com\/gold-ira-investment\/gold-ira-comprehensive-guide\/how-to-choose-the-best-gold-ira-company\/\">gold IRA company<\/a> like Advantage Gold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We are the highest-rated precious metals dealer and have thousands of five-star reviews online for you to read. We welcome you to do so and see what our clients have to say about their gold-buying experiences.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Diversify your thinking by understanding what investment options are available to you. It might be time to think outside the box and try something new.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Finally, create an investment plan that you can stick to and that has a reasonable chance for success. Take baby steps until you\u2019re adept enough to run.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Should You Invest in Precious Metals or Stocks?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Choosing between stocks vs. precious metals doesn\u2019t have to be binary. A balanced portfolio has room for both.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We have seen how, when owned in tandem, the different asset classes can fill the voids the other leaves behind.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Plot your goals, obtain the tools to achieve them, and stick to your plan.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Call us at Advantage Gold or <strong><a href=\"https:\/\/www.advantagegold.com\/contact\/\">click the link<\/a><\/strong> and we\u2019ll call you. We will take care of the precious metals investing.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019ll be one fewer thing on your plate. You\u2019ll have peace of mind knowing that you are anchoring your financial foundation with a tangible asset.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sometimes opposites attract.\u00a0 Sonny and Cher. Martin and Lewis. Peanut butter and jelly.\u00a0 Sometimes we need a little help from a friend to fill the gaps and complete the mission. Deciding between an investment in stocks vs. precious metals may be a similar scenario.\u00a0 The two are complete opposites, but they can be great complements. [&hellip;]<\/p>\n","protected":false},"author":14,"featured_media":30156,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[127],"tags":[1352,1353],"class_list":["post-29695","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ira","tag-investing-in-precious-metals-vs-stocks","tag-precious-metals-vs-stocks"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/posts\/29695"}],"collection":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/comments?post=29695"}],"version-history":[{"count":0,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/posts\/29695\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/media\/30156"}],"wp:attachment":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/media?parent=29695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/categories?post=29695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/tags?post=29695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}