News

11 Terrific Benefits of Investing in Platinum

platinum buillon bars stacked

 Did you know you can get the Sprott Money Weekly Wrap Ups, Ask The Expert, 

special promotions and insightful blog posts sent right to your inbox?

Sign up to the Sprott Money Newsletter here.

When the Spanish first laid eyes upon platinum in Columbia, they were not very impressed. They called it "Platina" or "little silver." Today, it's the rarest and most sought-after precious metal on the planet.

But if you want to invest in platinum, where do you start? What types of platinum investments should you start with? What are the benefits of investing in platinum?

Investing for beginners doesn't have to be scary. You just need a good starting point to know how it all works. 

Read on for eleven benefits of investing in platinum that you can enjoy right now.

1. Multiple Ways to Invest

To start with, there are multiple ways to invest in platinum. 

You can start by buying platinum outright as coins or bars. The major benefit of this is that you own physical platinum. However, you also need to consider where you'll store it.

Purchasing stock in mining companies is also a good way to invest in platinum. You don't need to worry about storage, but you can never truly be sure when the price of the company's stock will change or the success of the individual mining company.

Exchange-Trade Funds are also a way to invest in platinum without actually needing to keep it in your home; however, you don't actually own physical platinum in most cases. You simply have a claim to a specific amount of stored platinum that you can then sell later when the price of platinum goes up.

You can invest in multiple ways, so you're not putting all your eggs in one basket as well.

2. A Liquid Investment

If an investment can be exchanged for cash, then it is liquid. At any time, you can exchange platinum for a legal currency that you can spend anywhere. Therefore, platinum is a liquid investment.

In other words, platinum is a source of income in your portfolio. However, the cost of platinum rises and falls quickly, so you must be careful when you purchase and sell it.

You can use these fluctuations in the market value of platinum to earn a profit. When the price of platinum goes up, then go ahead and take your investment to a broker and exchange it for money. Then when the price goes down again, you can make a profit by purchasing more platinum.

It's a good way to earn a little extra money whenever you need it. You just need to have a little patience and pay attention to the market.

3. Industry Demand

There are a few industries that use platinum in manufacturing. These industries are always looking for more supplies to use.

It's very common to make jewelry out of precious metals such as platinum. Therefore, jewelry makers need to have supplies that they can work with to make such pieces. They'll pay a high price for these supplies, especially if they can make multiple pieces from the supply they receive.

Unfortunately, any jewelry made from precious metals is usually diluted to stretch the supply and lower the sales cost of the piece, so selling used platinum jewelry will only gain you so much money.

Electronics such as computers and smartphones also use a certain amount of platinum in them. These are generally small amounts; however, so it's not necessarily worth taking apart your old electronics to sell the platinum.

The other major industry that uses platinum is the automotive industry. With the rise of a need for clean energy sources for cars, many manufacturers are turning to platinum to reduce emissions.

4. Limited Supply

One of the reasons that platinum is so valuable is because it's so rare. There are only two places in the world with decent supplies of platinum known right now: South Africa and Russia. 

These supplies will not last forever, making the price of platinum per ounce rise as the mines in these countries start dwindling. That makes it hard to get a hold of, but the investment is more than worth the effort for that very reason.

Furthermore, if anything were to happen to the mining industries in either Russia or South Africa, then the price would go up even more as supply became more difficult to get a hold of. This would be a great opportunity to earn a larger profit. 

No one knows what the future will bring. You might consider watching how precious metal prices change during certain economic and political events before you start investing.

5. Market Demand

Because so many industries use platinum, many people and groups are trying to become suppliers of platinum. That means that a lot of different organizations are looking to buy and sell platinum for a profit. This is the market demand.

Currently, it's estimated that demand for platinum will grow by about 7 million ounces across the globe over the next few years. Because of the limited supply, the cost of platinum will rise quickly. Right now, is therefore a good time to invest in platinum.

Unless a new major supply of platinum is found somewhere else, then the price will be much higher within the next few years. 

The prices of precious metals, including platinum, are constantly changing just like the stock market. This has to do with how much each mine produces and how much demand there is. But no matter how much it changes, platinum will always have a high demand and value.

6. Intrinsic Value

Some people believe that the fiat money system will eventually collapse. Canadian and American dollars alike will become worthless without anything of actual value to support them. Many who believe this don't know when this will occur, and so they are preparing sooner rather than later.

They do this by purchasing precious metals. If and when fiat money collapses, they will have a tangible item of value that they can use to barter or trade for goods.

Platinum is popular with these individuals because of how rare and valuable it is. Currently, an ounce of platinum is worth about $1,200 CAD. A few ounces can therefore create healthy emergency savings if and when the fiat money system ever collapses. It's a good way to be prepared in case the worst happens.

To do this, you would need to purchase physical platinum. Stocks and Exchange-trade funds would no longer have value because they aren't tangible items with real value. Only actual platinum will have value in this scenario.

7. Easy to Mold

Platinum is very easy to bend, melt, and shape. This is why so many industries use it to create their products. The best part is that its value doesn't come from its shape but its weight and purity.

In other words, it doesn't matter what shape your platinum is in, those who are looking to buy it from you are going to want what you have. They'll melt it down to turn into any number of items that you interact with every day.

You can even melt platinum down yourself and reshape it for easier storage. When you're ready to sell it, it will still have the same value if its weight and purity are maintained.

Furthermore, platinum is highly resistant to corrosion or rust. So even if it's left in damp conditions for extended periods, there is no reason to worry about it losing its sale value.

8. Low-Risk

Again, even if the fiat money system fails and all currency loses its value, platinum will always have undisputed value. Furthermore, because of its rarity, platinum will always have a high value.

If fiat money never fails, then this doesn't eliminate the value of platinum. It will have a high value even when all the platinum is mined from the earth. 

And while the concept of buying low and selling high sounds a lot like the stock market, precious metal prices tend to be much more predictable. At the worst, you'll have to have more patience than you expected before you can make a profit from your platinum. 

It doesn't matter how much platinum prices rise or fall; it will always have a high value around the globe. This makes platinum a low-risk investment. You'll never have to worry about your investment becoming completely worthless, especially if you invest in physical platinum instead of stocks or ETFs.

9. Good for Speculation

The cost of platinum rises and falls constantly. This presents investors with many opportunities to earn a profit via speculation. Your timing has to be right, though, and you often need to have some patience.

First, make your platinum investments when prices are low. Pay attention to the prices of precious metals and what's going on politically around the world. This will give you an idea of when costs are about to plummet.

Once you are investing in platinum, you need to keep watching platinum prices. This part is a bit of a gamble. It's easy to make a profit as soon as the price goes up again, but you also want to make the highest profit possible.

If you wait too long, then prices could drop again. You want to wait until you can earn a significant profit before you sell your platinum investment. 

Finally, when prices drop again, you can start the process over with the profits you made the first time.

10. Portfolio Diversity

The phrase "don't put all of your eggs in one basket" refers to not putting all of your money or resources in one place. If you put all of your money into a single investment that fails, then you're left with no savings at all. You want to diversify your investments so you can still earn a profit if some fail.

All of the stocks, bonds, property, savings and other assets you own create your portfolio. Think of the money you invest as the eggs and each asset as a basket. This paints a clear picture of why portfolio diversity is so important.

Investing in platinum provides an extra basket for you to use and diversifies your portfolio. You can even invest in platinum in multiple ways so that it's even more diverse. 

If any of your other investments fail, you can still make a profit from your platinum investments. It protects you and your financial future since it's such a low-risk investment.

11. Higher Value Than Other Metals

Finally, many people might have concerns about how expensive investing in platinum is. They might look towards other precious metals as alternatives because they can often be purchased at a lower cost. 

Gold and silver aren't nearly as rare as platinum. They can be found in more places around the world and have a larger supply. Both are still extremely valuable, but their prices aren't as high as platinum.

However, while platinum has always had a higher cost than gold or silver, its price also fluctuates the most. The gap between the price's lowest and highest points is massive.

In other words, while you can easily make a profit by investing in gold or silver, platinum has the highest reward potential. This requires both care and luck, however, since the prices rise and fall often.

If you study how prices move, you can potentially earn a handsome profit every time you invest in platinum. Gold and silver investments tend to be a longer hold and simply don't earn the same profit levels as they don't experience the same short-term price fluctuations.

Enjoy the Benefits of Investing in Platinum Today 

These are just some of the benefits of investing in platinum. There are many reasons and methods to invest. All you need to know now is where you can make that investment.

One place for you to invest in platinum and other precious metals right now is at Sprott Money. You can choose from coins and bars of gold, silver, and platinum every day of the year, and we even have a live chart of market prices for you to see when it's time to cash in on your investment.

Buy today and see how much you can earn from investing in platinum with us.

 

Don’t miss a golden opportunity.

Now that you’ve gained a deeper understanding about gold, it’s time to browse our selection of gold bars, coins, or exclusive Sprott Gold wafers.

About Sprott Money

Specializing in the sale of bullion, bullion storage and precious metals registered investments, there’s a reason Sprott Money is called “The Most Trusted Name in Precious Metals”.

Since 2008, our customers have trusted us to provide guidance, education, and superior customer service as we help build their holdings in precious metals—no matter the size of the portfolio. Chairman, Eric Sprott, and President, Larisa Sprott, are proud to head up one of the most well-known and reputable precious metal firms in North America. Learn more about Sprott Money.

Learn More
about-sprott-skyline
no_comments

Looks like there are no comments yet.