If you’re one of the recent bullion portfolio makers, Gold and Silver must have crossed your mind for sure. However, there’s another invaluable addition you can consider, Platinum, when it comes to precious metal holdings.
Here’re the reasons why this metal is essential for long-term portfolio diversification as a beginner:
Despite the low availability and small demand segments, the metal has been traded at par with Gold. In the previous decades, there have been only a few incidents when it showed a sustainable dip in the price. Besides, the rebound rate of the metal has been pretty swift as well.
Diverse Existing Deamnds
From jewellery to industrial sectors, there’s a widespread demand for this metal worldwide. According to World Platinum Investment Council, the versatility of the precious metal keeps it in the high-demand segment with an expected rise of 10%. Even the automotive industry forecast shows a rise of 19% for the coming years.
As a beginner, you might be concerned about making huge investments in acquiring these precious metals. However, this precious metal is a convenient option with a low-risk profile. On top of this, the widespread demand is yet to reflect in its price, making it an immensely profitable addition for the future.
The primary supply of the metal is from South Africa. Interestingly, due to the operational difficulty, aging mines and increase in real-time expenses, the supply is declining. If forecasters can be trusted, the availability decline will be a norm.
Not only does it paint a positive picture in favour of a rise in prices, but it also makes this rare metal all the more precious.
To combat climate change, industries are now more inclined to utilise less toxic materials in their equipment. Whether it’s the manufacturing of ‘stable’ cancer instruments or internal combustion engines, the future scope of precious earth metal is enormous.
Every asset in your portfolio will be impacted by economic trends, monetary policy, currency markets, investor sentiment and physical demand. To offset the volatility of one asset, you need a variety of financial elements with different values and affecting factors. So, if you want to strategise a long-term investment plan, including the precious metal will be a good move.
While it might sound like a wrong reason to include the metal, that’s not exactly the case. Since Gold is a highly liquid commodity, the swings in prices will be relatively low. At the same time, with the lesser availability of Platinum, the valuation will be appropriate for you to buy at its low and sell when it’s high.
So, even with a few interested buyers, the price rise will be much quicker and easier with the metal.
With the finiteness of Platinum availability and the ever-increasing demand, it is a unique yet functional addition to your portfolio. Even the historical analysis of the earth metal depicts a growth projection in its price over a long time. So, if you want to reduce your volatility losses and enhance diversification, including this metal should be your priority.