Now that you know a little bit more about precious metal investing, we are ready to discuss how precious metal investments compare to the most traditional investment – the stock market.
Precious Metals vs. Stocks
Many of the visitors on our website are already familiar with traditional investment vehicles like stocks, but aren’t so familiar with gold and silver.
The main difference between the two classes of investments is that stocks are classified as “equities”, meaning that the stockholder owns a portion of the company that issued the stock, while precious metals are classified as “commodities”, meaning that the owner of the metal holds a distinct, physical product.
Stockholders make money when the companies they own stock in increase profits or improve their business standing, resulting in an increased demand to own the company, and thus a rise in the price of their stock.
Precious metal investors make money when the demand for precious metal increases, thus causing the “spot price” of their metals to increase.