As talk of a global financial crisis continues, Governments, Central Banks and investors have changed their behaviour to face the economic headwinds.  Historically, investing in precious metals has been a classic flight to safety and in recent times it has popped back on the radar for SMSF Trustees.

Here are a few reasons why:

Tidy up, drawdown or cash up

Precious metals are liquid and can be quickly and easily traded when necessary, ensuring your fund has access to cash to pay fees or take advantage of investment opportunities.

Invest in AUD

While precious metals prices have been rising in other currencies, the AUD is still relatively low.  So, it may make sense to consider precious metals at this point in time.

Add a wealth preservation “defensive” asset

Apart from cash, there are very few truly defensive assets, however, gold and silver have been considered a safe-haven for centuries.  Plus, physical precious metal can not only act as a protector of wealth with no counterparty risk, this tangible asset has demonstrated the ability to add growth to your investment portfolio.

Diversify and balance risk

If you already hold an allocation to gold, diversifying your precious metal portfolio can benefit your investment strategy further.  By also including silver, platinum and even rhodium you are effectively incorporating the benefits of supply and demand metrics, metal price ratios and currency hedging.   All metals perform differently, so just like including cash, property, bonds and shares, balancing your metal portfolio can work to spread risk and deliver many benefits.

Diversify and balance risk

If you already hold an allocation to gold, diversifying your precious metal portfolio can benefit your investment strategy further.  By also including silver, platinum and even rhodium you are effectively incorporating the benefits of supply and demand metrics, metal price ratios and currency hedging.   All metals perform differently, so just like including cash, property, bonds and shares, balancing your metal portfolio can work to spread risk and deliver many benefits.

Compliance

Last- but not least, holding precious metals in a secure vault such as a Pool Allocated program will ensure you have access to regular audits and reports.  A metal account statement showing the current value of your investment and transaction history throughout the year will be provided to Trustees or their Accountants on request. Precious metals held in a pool allocated account is fully insured to replacement value and held “at arm’s length” as required by SMSF legislation.

 

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GENERAL ADVICE WARNING – The information contained in this article is of a general nature only and you need to seek professional advice based on your own personal circumstances before acting. Although we consider this material reliable, no warranty is given, and no liability is accepted for any statement or opinion or for any error or omission.

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