Smart investment

A smart investment may mean different things to different people. One investor may consider an investment to have been smart if it is safe and protects your wealth, hedging against inflation without risking your saving. For others a smart investment may mean spotting a high risk, high reward opportunity and making a strong profit.

Gold is a popular investment, and for many people is certainly considered a smart investment. P recious metal or bullion investment is not restricted to just gold however. There are other metals deserving consideration. You should be taking account of silver, palladium and platinum, and analysing their market values - against each other and against gold to work out which is the smart investment for you.

Portfolio diversification is certainly one of the methods recommended by many when trying to make a smart investment. By investing in multiple investment assets, even multiple types of precious metals, can help spread your risk, and increase potential reward.

Below we discuss some of the other metals you can consider in addition to gold and silver. Please note, BullionByPost do not provide investment or financial advice, and always recommend speaking to an independent financial advisor if you're unsure which is the best option for you.

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Palladium and platinum are amongst the world rarest metals, scarcer even than gold. Palladium is the rarest of the two and but this isn't always reflected in the current market price. Platinum was the more valuable than palladium until recently, with the metal suffering from the declining popularity of diesel vehicles. Palladium, used in catalytic converters for petrol-based cars, has retained industrial demand. Both Palladium and platinum are extremely heat resistant making them an essential industrial components. Their low electrical resistance makes them a cheaper alternative to gold in electronic devices.

Since the dawn of time precious metals, particularly gold and silver, have been used as a store of wealth and a medium for trade. Today, precious metals have their place in a savvy investor's portfolio. They can diversify a portfolio, offer a hedge against other investments and be a ‘ safe haven ’ in times of failing markets. Over history, when other investments have failed, gold and silver have held or even increased in value. Read more about gold investment in our Ultimate Guide to Gold Investment.

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What should I invest in?

Both palladium and platinum offer similar investment advantages to gold and silver. Because gold is recognised as the leading safe haven investment it may be expected to outperform other precious metals in times of difficulty. Platinum and palladium do though have other attractions to investors. In addition to their intrinsic value due to scarcity, palladium and platinum are of huge industrial use and as technology advances this demand can only increase.

Outright ownership of a physical precious metal gives an investor total control but there are other investment options. First amongst the others are Exchange Traded Funds or ETFs. Put simply, ETF investors hold a share in the metal owned by the fund. ETF investors save on storage and insurance but never actually own their metal and must put trust in the funds management. There are trade funds for all of the precious metals.

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UK tax on precious metals

Tax is a major consideration when choosing a precious metal investment. In the UK gold is taxed differently to other precious metals, including silver, platinum and palladium.

Gold bars and coins are VAT-free, in contrast other precious metals are subject to VAT. All legal tender UK coins produced by The Royal Mint are also exempt from Capital Gains Tax, which is applied to all precious metals. Read more about CGT on gold and paying VAT on silver.

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Buying physical precious metals

Precious metals can be bought and traded as bars or ingots and in the form of coins. BullionByPost has a large selection of precious metal bars, including platinum and palladium bars a huge range of gold and silver coins plus coins minted in other precious metals. Popular platinum coins include British Britannias , Canadian Maples, US Eagles, Isle of Man Nobles and Australian Koalas. The Canadian Maple is very popular in the limited range palladium coins.

Bullion dealers, including BullionByPost, buy and sell coins and bars purely on their metal content, selling at a small margin above and buying at a small margin below the market price. Coin collectors or ‘numismatists’ may pay more for collectible coins.