Women Investing in Gold and Silver: How to Overcome Hesitancy and Build Wealth
An engagement ring, herringbone necklace or diamond tennis bracelet are what used to come to mind when chatting about gold and silver with my girlfriends. In fact, we thought gold and silver investing was an area beyond our reach or understanding. I was wrong, and I am not alone.
Studies show many women are, and have been, hesitant to risk their money beyond cash equivalent investments like certificates of deposit (CD’s) or money market accounts, keeping almost 70% of their portfolio in these low-return investments. I can certainly relate as I’ve struggled for years with moving my cash around in low-risk options. Fortunately, it seems the tide is beginning to turn. But first, let’s determine why the change has been so slow, what the situation is now, and a step-by-step plan to help women prepare to invest.
Making higher risk investments in hopes of greater rewards requires confidence. In fact, only 9% of women see themselves as making better investments than men!
It may also not surprise you that women tend to lack confidence because the gold/silver industry is mostly an area where men have so far dominated. Why is this a factor? Think of it this way, each time I take my car to the mechanic, I feel as though I am at their mercy. It’s intimidating when you don’t know the answers and you’re relying on someone else to take care of the issue. You hope they know how to repair your car, operate within best practices while also charging a reasonable fee!
The same thing often happens to women when it comes to investing in gold and silver.
Currently: Women Are Investing More These Days
In recent years, women have begun to invest more confidently. In fact, 71% of women feel more confident now about investing after setting up a financial plan which includes a comprehensive overview of your financial goals and the steps you need to take to achieve them.
Moreover, nine out of ten women are planning to make investment choices in the next year that will help their money grow. The change is evident in the 2021 Women and Investing Study. Results show the percentage of women investing beyond retirement has risen from 44% in 2018 to 67% just three years later!
Although women may not see themselves as great investors, the truth is we do have the ability to make investment decisions just as well as men, if not better. That’s because we delve into the research, pay attention to details and carefully review all investment options. Generally speaking.
Looking Ahead: The Key to Overcoming Obstacles to Investing in Gold and Silver
Knowing we have the potential, what is it most women need to keep moving forward in investing? The key to taking charge is increasing what you know about investing in gold and silver. After all, knowledge is power. For many, myself included, it all begins with a plan.
Steps to Prepare for Investing
Ready to start or begin to increase your investment in precious metals? The following steps may provide an excellent path to preparation.
1. Determine Your Overriding Goal
It’s important to know what you want to achieve from growing and/or diversifying your investments. These goals will be what you use to guide your investment decisions and outline your financial plan. Some common goals for investors include:
- Protecting your wealth
- Having a hedge against inflation
- Contributing to an IRA
2. Create A Financial Plan
First off, this may sound way more intimidating than it is. Just remember, your primary goal is to develop a strategy for your financial future. Let’s begin with discussing the difference between investing and saving so we’re on the same page.
Saving is an important part of any financial strategy. This is money you set aside each month after you’ve paid all your bills. Most of us operate within a budget but not as many people are aware of where all the money is being spent on a monthly basis. To help track your expenses, you can go as simple as using Mint, a free online budget planner from Intuit, to a comprehensive and detailed Quicken subscription. Once you know where your money is being spent each month, you can take steps to reduce your unnecessary expenses and begin setting those funds aside for your future.
Investing, on the other hand, is more of a wealth building endeavor. In other words, your goal is to increase your wealth as opposed to preserving your wealth. Investing goals should include your time horizon (the period of time you expect to hold an investment until you need the money), risk tolerance (refers to the level of risk a person is willing to endure with their financial portfolios) and financial goals. As we’ve seen so far in 2022, you can no longer rely on a traditional 60/40 portfolio. That is, 60% stocks and 40% bonds. In fact, the bond market has performed worse than the stock market through the first half of this year!
For example, up until 2020, you could more or less maintain your purchasing power by investing conservatively in government bonds. Over the past couple of years, we’ve seen an explosion in the inflation rate, taking a toll on the average American. Currently, an investment in bonds will yield you a negative real return of approximately -6%. At this rate, you’ll lose half your purchasing power in 12 years!
Regardless of what you choose to place in your financial portfolio, and contrary to popular belief, it’s best not to have a “set it and forget it” investment plan. In other words, you don’t want your investment plan to be on autopilot. It needs to be fluid and and should be checked regularly and adjusted, if need be. Even life changes in your career, employment status, marriage, divorce, children and/or changes in the economy may cause you to reevaluate your investment plan.
So far, we’ve mentioned things we wouldn’t recommend including in your portfolio. What we DO suggest is that you consider precious metals, such as gold and silver, as part of your investment plan. Why? Because these metals have been used as money for nearly six thousand years, so they have a long track record, to say the least. They’re also a great way to protect yourself against high rates of inflation, allow you to maintain your purchasing power, and ideally, will outperform most other asset classes when you need them most. However, don’t just take our word for it, it’s important that you educate yourself about precious metals as well.
While we at Atlanta Gold and Coin Buyers of Johns Creek are happy to speak with you about your general plan when it comes to investing in gold and silver or cashing out of gold and silver, sometimes a well-rounded financial game plan is in order. For a professional and complete analysis of your current and future plan, Martha M Spence is a great resource. As a Wealth Management Advisor for Merrill Lynch in Gainesville, GA, we have and continue to work with many of her clients and vice-versa. You can view Martha’s professional profile and contact information at this link.
3. Learning About Investing in Gold and Silver
Start by seeking knowledge. Women are already proficient in learning what they need to know for many aspects of life. Now, all you need to do is apply that thirst for understanding and attention to detail.
Before investing in gold and silver, it’s a good idea to find out the differences between gold COINS and gold BULLION. You may also want to explore both gold and silver investments to decide which to choose. Here’s a sample of a few things you can learn about precious metals.
Gold Coins vs. Gold Bullion
The choice between gold coins and gold bars (aka- bullion) is a bit complicated. Gold bars are priced lower or have lower premiums than gold coins. However, gold coins also have their advantages.
Gold coins are minted and guaranteed by governments, so you are assured that their weight, precious metal content and purity are exactly as advertised. Investing in gold coins is a bit more complex than investing in bars. After all, you have more choices to consider, including their prices, grades, and sizes. Plus, gold coins may appeal to both investors and collectors.
If your goal is to purchase gold coins as an investment and a hedge against inflation, it probably makes more sense for you to focus on gold bullion coins. These are coins that are bought and sold primarily for their underlying gold content as opposed to their collectability. Examples of gold bullion coins include American gold eagles, American gold buffaloes, South African gold krugerrands, Austrian gold philharmonics and Canadian gold maple leaf coins.
Silver vs. Gold
When you invest in gold and silver, you create a hedge against inflation. Because precious metals have intrinsic value and are finite resources on earth, they rise as demand increases and supply diminishes. In other words, gold and silver can’t be produced out of thin air like our current paper currency. Rather, it takes time, labor, equipment and other resources to identify deposits, mine or extract the ore and refine precious metals.
Whether to invest in gold, silver, or both is another question you need to answer for yourself. Although many people invest in silver, history has shown that gold is a more stable investment. Not only that, but it is used more for investment purposes and is traded among central banks; whereas, silver is used more for industrial purposes.
Moreover, gold is less volatile than silver, meaning its price goes up and down more slowly and steadily. This gives you time to make adjustments like selling or buying at the optimal times. To use a stock analogy, silver is more like a high flying tech stock, like Tesla or Amazon, while gold is more of a stalwart investment like Procter & Gamble or Exxon Mobil.
You may want to add silver at some point, especially when silver prices pullback and buying opportunities present themselves, but gold usually makes more sense as your principal investment strategy.
Whether you invest in gold or silver, you have several options. You can simply purchase the tangible physical gold or silver bars or coins, start a precious metals IRA, or buy gold and silver through stock-related investments such as ETFs. Research all these options carefully before you choose where to begin. Then, you can start with confidence and work towards a win.
Physical vs Paper Gold & Silver
There’s an old adage when it comes to gold and silver that goes something like this – if you don’t hold it, you don’t own it. This is a concept that most investors don’t consider when investing in precious metals, but it’s one that they should. We’ll discuss a few of the reasons why this is the case.
We will begin with purchasing physical gold but having it stored elsewhere such as with a coin dealer. While there are many coin dealers that provide depository services and who are extremely reputable companies, in recent years, a few of them have gone bankrupt or been shut down by the authorities. Some of them were due to unethical business practices, some were highly leveraged and poorly managed, while others failed to fill orders or allocate purchases into individual accounts. In other words, there’s some risk whenever you have another party hold your physical gold.
Additionally, more and more banks are restricting the types of items you can keep in a safe deposit box. At least one major bank no longer allows their clients to keep physical gold and silver stored at the bank. We don’t know what the potential backlash would be if these restricted items were to be found, but it’s probably best not to risk it. The last thing you would want is to to have your gold confiscated. And I’m sure no one hopes to see a repeat of Executive 6102.
Don’t misunderstand what we are saying. Even though storage may be a temporary issue or minor inconvenience, we still strongly advocate that you limit your investments to physical gold and silver as opposed to ETFs, mutual funds or stocks. The reason being is that many ETFs and mutual funds are highly levered. In other words, they’re not fully backed by physical gold and silver. In some cases, its believed that they may be levered at 200 to 1, if not more. To put it another way, they may have only 1 ounce of gold on hand for every 200 ounces of gold contracts that they’ve issued. Not sure about you, but for me, that math doesn’t quite add up and I personally don’t want to risk being left empty-handed.
Additionally, stock-related investments typically don’t give investors the option to receive physical gold or silver when they sell their holdings. In other words, if you’re investing in an ETF, such as GLD (the proxy for gold), when you sell your holdings, you’ll receive cash as opposed to physical gold. If in the future, cash is no longer the preferred medium of exchange, you might find yourself in a predicament.
Lastly, most stock-related gold and silver investments, especially those that aren’t fully backed by precious metals, are based on confidence. If the market were to lose confidence in these investments or demand physical gold and silver as settlement without sufficient metals on hand to meet this request, it could, in theory, cause these “paper” investments to collapse and potentially go to zero. Fortunately, that will never be the case with your physical gold and silver due to their intrinsic value. Remember, metal survivability rate is 6k years and counting.
Atlanta Gold & Coin Buyers Works with Women Investors
Now that we’ve given you some of the basics about your precious metals investment journey and you’re ready to take the first step, give us a call to set-up your appointment. At Atlanta Gold & Coin Buyers, we are committed to helping women make the right precious metals investments. Not only can we advise you on the best gold and silver options to meet your goals, but we also buy physical gold and silver when you are ready to make a change.