Investing in precious metals is one of the popular ways for investors to diversify their portfolios and hedge their investments against inflation. Even though gold and silver get most of the attention when it comes to investing in precious metals, platinum is also an attractive investment option for investors looking to make significant returns from investing in precious metals.
Like gold and silver, platinum is a rare and valuable metal with many use cases. This makes it a unique investment option.
In this guide, we will give you a walkthrough on how to invest in platinum online. We will also explore the benefits and risks associated with investing in platinum. Not just that, we will also highlight the different ways to invest in platinum as well as give you a comprehensive guide on how to get started.
Before we give you all the exciting details, let’s start with the basics.
What is platinum
Platinum is a unique precious metal that is lauded for its durability, beautiful shine, and resistance to corrosion. Being a very rare and valuable metal, platinum has numerous use cases and is one of the major raw materials in the industrial and commercial industries.
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Trading with financial instruments carries high level of risks that is not suitable for all investors. Before making any investment decisions, you should seek advice from independent financial advisor to ensure you understand the risks involved.
Platinum is used in everything, from catalytic converters to jewelry to medical components and even electronic equipment.
Due to its scarcity and insane demand, platinum is used as a store of value and hedge against inflation.
If you’re looking for an investment option that allows you to diversify your portfolio and protect your wealth, you won’t go wrong investing in platinum.
Why invest in platinum
Investing in platinum is a great idea for anyone who wishes to make significant returns trading precious metals. While platinum, on the one hand, is a precious metal, on the flip side, it has a variety of use cases. Platinum is used in the manufacturing of different products including catalytic converters for cars and jewelry. Given its myriad of use cases, there seems to be a stable demand for platinum, compared to other precious metals.
Benefits of investing in platinum
Wondering if there are any benefits that come with investing in platinum? Well, read on as we go over them.
- Portfolio diversification: If you have always wanted to diversify your investment portfolio, investing in platinum is an awesome idea. What’s especially unique about platinum is its low correlation with other assets. What this means is that investing in platinum will reduce your overall portfolio risks.
- Store of value: Like other precious metals like gold and silver, platinum can be a store of value. More so, it can help protect your investment against inflation and currency devaluation.
- Industrial demand: Platinum has a variety of use cases. Because of the demand it gets from different industries, platinum has continued to appreciate in value.
Risk of investing in platinum
Like every other type of investment, there are quite a number of risks that come with investing in platinum. Stay with us as we go over these risks together.
Price volatility: While investing in platinum promises to yield significant returns, keep in mind that platinum prices are highly volatile. What this simply means is that there is the potential for swift price swings in a short period of time.
Market risks: Platinum prices can be impacted by a variety of factors, including changes in supply and demand, economic indicators as well as geopolitical events.
Counterpart risks: If you decide to invest in platinum either via an exchange-traded fund (ETF) or through other financial products, there is the inherent risk that the fund issuer or custodian may default or go bankrupt.
How has platinum performed?
Platinum, like other metals is a highly volatile asset in terms of price performance over the years. Read on as we take a deep dive into its performance.
Price history: Platinum performed superbly in 2008, reaching an all-time high of $2,290 per ounce. Its performance during this period was largely sponsored by the global financial crisis of 2008.
However, in the following years, platinum experienced a sharp decline in price due to oversupply and weak demand from the automotive industry, which is one of the largest consumers of platinum. By December 2015, platinum hit its lowest price point in nearly 10 years, at around $890 per ounce. Since then, platinum has experienced a gradual recovery in price, reaching around $1,200 per ounce in early 2021.
Comparison to other metals: Platinum is often compared to other precious metals like gold and silver. Over the past decade, platinum’s performance has been weaker compared to gold, which has seen a steady increase in price due to its status as a safe-haven asset during times of economic uncertainty. Silver, on the other hand, has seen similar levels of volatility as platinum, with periods of strong price growth followed by sharp declines. However, silver has generally been more affordable to investors due to its lower price point compared to platinum.
Market factors impacting platinum’s performance: As mentioned earlier, platinum is heavily influenced by the automotive industry, as it is a key component in catalytic converters. Thus, any changes in demand from the auto industry can have a significant impact on platinum’s price. In addition, platinum is also impacted by changes in mining supply and geopolitical factors that can impact global supply chains.
Overall, investing in platinum can be a high-risk, high-reward proposition. Its performance is influenced by a variety of factors, and it’s important for investors to carefully consider their investment goals and risk tolerance before deciding to invest in this asset.
Tips for buying platinum online
Ready to invest your hard-earned money in platinum? Here are some top tips that will help you make an informed decision.
- Choose a reputable platform: Make sure to do your research and choose a brokerage platform with a good reputation and a track record of providing reliable service to investors. Look for platforms that are regulated by reputable financial authorities, such as the SEC or FCA.
- Verify the authenticity of the platinum: If you’re buying physical platinum, it’s important to ensure that it is genuine and of high quality. Look for sellers that offer certificates of authenticity or other proof of the platinum’s purity and origin.
- Consider storage and security: If you’re buying physical platinum, you’ll need to consider how you plan to store it securely. Look for brokerage platforms that offer secure storage options, such as vaults or safety deposit boxes. Alternatively, you can consider purchasing platinum ETFs or other digital assets that don’t require physical storage.
- Stay informed about market conditions: Keep up-to-date with the latest news and market trends that could impact the price of platinum. This will help you make informed investment decisions and adjust your strategy as needed.
- Diversify your portfolio: Investing in platinum can be a good way to diversify your portfolio, but it’s important to remember that no investment is without risk. Consider diversifying your portfolio across a variety of asset classes to spread your risk and protect your investments.
- Choose a reputable platform: Make sure to do your research and choose a brokerage platform with a good reputation and a track record of providing reliable service to investors. Look for platforms that are regulated by reputable financial authorities, such as the SEC or FCA.
- Verify the authenticity of the platinum: If you’re buying physical platinum, it’s important to ensure that it is genuine and of high quality. Look for sellers that offer certificates of authenticity or other proof of the platinum’s purity and origin.
- Consider storage and security: If you’re buying physical platinum, you’ll need to consider how you plan to store it securely. Look for brokerage platforms that offer secure storage options, such as vaults or safety deposit boxes. Alternatively, you can consider
purchasing platinum ETFs or other digital assets that don’t require physical storage.
- Stay informed about market conditions: Keep up-to-date with the latest news and market trends that could impact the price of platinum. This will help you make informed investment decisions and adjust your strategy as needed.
- Diversify your portfolio: Investing in platinum can be a good way to diversify your portfolio, but it’s important to remember that no investment is without risk. Consider diversifying your portfolio across a variety of asset classes to spread your risk and protect your investments.
Investing in platinum online
Investing in platinum online is among the convenient ways to get exposure to this precious metal. For newbies wondering how to invest in Platinum online, here is a step-by-step guide you should follow.
Step 1: Choose a brokerage platform
Before you can invest in platinum, you need to register with a brokerage platform that offers platinum as a tradable asset. Thankfully, there are many notable and reliable brokerage platforms out there you can do business with. Some of our favorites include eToro, Fidelity, Robinhood, and Admiral Markets.
Step 2: Open an account
After choosing your preferred brokerage platform, you still need to open an account. This typically involves providing basic information about yourself and submitting the required documents so your account can be verified.
Step 3: Fund your account
After setting up your account and verifying your identity, you’ll need to fund your trading account. Depending on the broker you opted for, you should find a variety of funding options, including bank transfers, e-wallets, credit or debit cards.
Step 4: Choose your investment strategy
There are multiple ways to invest in platinum online. Here are some of the options you can explore:
- Physical platinum: Some brokerage platforms allow investors to buy and hold physical platinum. And just so you know, this is the most direct way to invest in platinum. Keep in mind that investing in physical platinum requires that you make provisions for storage and security.
- Platinum ETFs: Platinum ETFs (Exchange Traded Funds) provide a unique opportunity to invest in platinum without owning the physical metal. Through platinum ETFs, you get to own shares in an ETF that holds platinum. For investors looking for a convenient and accessible way to invest in platinum, investing in platinum ETFs is the way to go about it. Nonetheless, keep in mind that investing in platinum ETFs also comes with its own risks.
- Platinum features: With platinum features, investors have the opportunity to bet on the future price of platinum. Most experts see this platinum investment option as a speculative and risky way to gain exposure to platinum.
Step 5: Execute your trades
After choosing your investment strategy, you can go ahead to execute your trade by placing either buy or sell platinum
Step 5: Monitor your investment
After executing your trades, you don’t just want to turn a blind eye. You need to keep monitoring your investment and adjusting your strategy as needed based on market conditions.
How to buy platinum on eToro
If you’re looking to buy platinum on eToro, here are the steps you can follow:
- Sign up for an account: First, you’ll need to create an account on eToro. This process is simple and can be done in just a few minutes.
- Complete your profile: Once you’ve created an account, you’ll need to complete your profile by providing some personal information and verifying your identity.
- Deposit funds: Next, you’ll need to deposit funds into your eToro account. This can be done using a variety of payment methods, including credit/debit cards, bank transfers, and e-wallets.
- Search for platinum: Once your account is funded, you can search for platinum using the search bar at the top of the eToro platform. You can buy platinum in the form of a CFD (contract for difference) or an ETF (exchange-traded fund).
- Place your order: Once you’ve found the platinum investment you want to make, you can place your order on the eToro platform. You can choose the amount you want to invest and set stop-loss and take-profit orders to manage your risk.
- Monitor your investment: After you’ve made your investment, you can monitor its performance on the eToro platform. You can also close your position at any time by selling your platinum investment.
Conclusion
In conclusion, investing in platinum online can be a smart way to diversify your investment portfolio and potentially earn returns on your money. With the right research and preparation, you can safely and effectively invest in platinum from the comfort of your own home.
When considering investing in platinum online, remember to choose a reputable platform, verify the authenticity of the platinum, consider storage and security, stay informed about market conditions, and diversify your portfolio. By following these tips, you can help ensure a safer and more successful online platinum investment experience.
If you’re ready to start investing in platinum online, take the time to do your research, consult with a financial advisor if necessary, and choose a reputable platform like eToro to get started. With patience and perseverance, you can build a solid investment portfolio that includes platinum and other valuable assets. Start your journey towards platinum investment today.
Frequently asked questions
Is it safe to invest in platinum online?
Yes, it can be safe to invest in platinum online as long as you choose a reputable platform, verify the authenticity of the platinum, and take steps to protect your investment.
How do I know if the platinum is authentic?
You can verify the authenticity of platinum by checking for the hallmark, or stamp, that indicates the metal’s purity. You can also have the platinum tested by a professional or trusted third party.
What are the risks of investing in platinum online?
The risks of investing in platinum online include market volatility, changes in supply and demand, and fluctuations in the price of platinum. It’s important to research and carefully consider these risks before investing.
What is the minimum amount required to invest in platinum online?
The minimum amount required to invest in platinum online can vary depending on the platform you choose. Some platforms may require a minimum investment of several thousand dollars, while others may allow you to invest smaller amounts.
What are some strategies for investing in platinum online?
Some strategies for investing in platinum online include dollar-cost averaging, diversification, and active monitoring of market conditions. It’s important to do your research and consult with a financial advisor to determine the best strategy for your individual investment goals and risk tolerance.
