The Advantages And Disadvantages of Investing in Metals in Their Physical Form

The whole idea of buying precious metals is something that is certainly striking to many people. The thing is that you can either buy the metals in the physical form or ETF form as well. The choice is yours. However, the thing is that the fact that there are benefits as well as disadvantages of these metals in the physical form.

This has been a topic of debate for some time now, and while many people are in favour of it, there are some people who are against it either. Whatever the case may be, the purpose of this article is to simply weigh in on both the advantages and the disadvantages of owning metal in physical form.

So, let’s have a look.

The Pros

First things first, we are going to be looking at the pros. There are a number of them available, but for the sake of keeping things simple, I am mentioning them down below.

  • They Serve as Tangible Asset: Simply put, having metal in physical form is great because you have a tangible asset at hand. The metals cannot be destroyed in any particular way, and they will not deteriorate over time with.
  • They Have a Store of Value: Another advantage that you are getting out of going for physical metal is that there is a good store of value. You can earn a profit on them as well, simply because you can sell them when the prices are going up and not sell them when they are going down. For anyone who is looking to build a good investment portfolio, this is certainly an important thing to keep in mind.
  • Hack Proof: Simply put, you cannot simply hack or erase physical metals just because you felt like it.
  • Private: Another benefit here is that they are private, and you can keep them strictly confidential as well.
  • No Rocket Science Required: With physical metals, you really do not have to worry about any rocket science.

The Cons

On the contrary, there are some cons associated with having physical metal as well. While the benefits certainly outweigh, it is still a good thing to have a look at the cons as well.

  • There are Transaction Costs: First things first, you must know that there are transaction costs involved in the process.
  • Storage: Another thing is that storing physical metals can be a hassle. If you do have a lot of silver or gold bars, then storing them away is something that is going to be an issue.
  • Low Liquidity: Another thing that you must know is that these metals are low when it comes to liquidity. You cannot just hand them and turn them into cash.
  • You Have to Pay Tax: As far as IRS is concerned, both gold and silver bullions have tax applicable on them.
  • No Income or Interest: You cannot really produce any income or interest from having physical metals.