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Precious Metals Investing: Protect and Grow Your Capital with the Worlds’ Oldest Money

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With increasing political uncertainty all over the western world, changing global power structures, continued sluggish growth, and record low interest rates, precious metals are today more relevant than ever. Together with cryptocurrencies like Bitcoin, aka digital gold, smart investors who want to preserve and grow their capital in this uncertain environment should take a closer look at the benefits of investing a portion of their portfolio in precious metals.

In this article, we will take a closer look at the four most common precious metals and how you can profit from them.

Gold

The original form of money, and still considered by many to be the only “true money”, unlike fiat currency, which is what we use today. Unlike in the past, when you could exchange your dollars or any other currency for physical gold, fiat currency is not backed up by anything else than a number printed on a piece of paper. Fiat currency is only backed up by governments who are free to print money as they wish, nothing is stopping them from creating more money out of thin airr.

Gold is the only currency that retains its buying power over time – it has intrinsic value. Due to this unique characteristic, many people indeed consider gold to be the only true money. Looking at the gold price chart since year 2000 gives us a clear picture as to how well gold actually works in protecting your buying power against inflation, which today’s interest rates are not even close to being able to.

As you can see from the chart, gold topped out just before 2012 and has been in a downtrend since that. However, there are signs that since the beginning of 2016, the trend has shifted, and the gold market may now be ripe for yet another rally up.

Silver

As gold’s younger sibling, silver has not been getting as much attention from investors. And perhaps rightfully so, as returns have been rather slim for the past five years. Silver is often seen as a leveraged play on gold, meaning that price movements are generally in the same direction, but they tend to be more extreme. However, it is also important to note that silver has many more industrial uses than gold, and as such is not solely used as a store of value.

From a technical perspective, silver now appears to have come down closer to the longer term price trend, making a large move to the downside less likely to happen going forward.

Platinum

A very expensive metal, known for being correlated with the car industry and therefore cyclical in its nature. There are only a few companies out there that actually mine platinum, meaning that either the direct ownership of platinum coins or an investment in a platinum-backed Exchange Traded Fund are your best options for getting exposure to the price of platinum.

Palladium

There is no mining companiy purely mining palladium, so buying mining shares is not a good option for getting exposure to the price of the metal. Instead, ETF’s or physical ownership would be the way to go for most retail investors.

Among other uses, palladium is an important component in catalytic converters that reduce the amount of harmful air pollutants from cars. Some analysts believe that this will continue to drive the price of palladium higher, as China and other large developing countries are stepping up the fight against air pollution. In fact, palladium has outperformed both gold, silver, and platinum by more than 300% since 2009. And as if that’s not enough, according to reporting by the Financial Times, palladium has outperformed all other commodities in the Bloomberg Commodity Index so far in 2017.

How Can I Invest in Precious Metals?

As a retail investor, you have many choices when it comes to investing in precious metals. We will here cover the three main categories; physical ownership, ETF’s, and futures contracts.

Physical ownership

This is precious metals investing in its most basic form, and it is still the preferred choice for many investors. The most obvious advantage of buying and storing precious metals such as gold and silver yourself is the protection it offers against all kinds of financial and political turmoil. No matter what happens in the financial world, you still hold on to your gold and you don’t have to rely on any third party such as an issuer, stock or futures exchange to be operational.

Exchange Traded Funds (ETF’s)

Buying a precious metals ETF is generally considered the easiest and most straight-forward option for retail investors and traders wanting to get into precious metals. ETF’s are traded on stock exchanges just like a stock, which is something that most people are familiar with. You simply search for the ETF’s ticker code on you broker platform and buy it in just the same way you buy a stock.

When choosing to invest in an ETF, it is important to understand exactly what it is you are buying. It is advisable to stick with ETF’s from well-respected issuers that are not overly complex. Below we have listed a well-known ETF’s for each of the four precious metals we have covered. They are all backed by the physical metal, which makes it easy for retail investors to understand what is driving the performance of the fund.

  • SPDR Gold Shares ETF – GLD: Currently the largest physical gold-backed ETF in existence. This is an extremely popular choice for anyone interested in exposure to gold. The fund holds physical gold at HSBC’s London Gold Vault. GLD is traded on stock exchanges in New York, Singapore, Tokyo, Hong Kong, and in Mexico.
  • iShares Silver Trust ETF – SLV: By far the most popular physical silver-backed ETF. Just like GLD, it offers investors exposure to the price of the underlying metal without the complexities of the futures market and the logistical hassle of direct physical ownership.
  • ETFS Physical Platinum Shares ETF – PPLT: Offers physical ownership of platinum bullion bars stored at their vaults in Zurich and London. Considering the fact that platinum is not as widely traded as gold and silver, a physically backed ETF like PPLT is one of the best ways for retail investors to profit from this precious metal.
  • ETFS Physical Palladium Shares ETF – PALL: Just like PPLT, PALL is also physically backed with palladium bullion bars stored in vaults in Zurich and London. An ideal choice for retail investors looking for exposure to the price of palladium.
  • ETFS Physical Precious Metals Basket Shares ETF – GLTR: Perhaps the ultimate precious metals ETF for the average retail investor looking to get a diversified exposure to all four precious metals. Keep in mind, however, that gold and silver accounts for more than 85% of the funds’ holdings, meaning that the more exotic metals platinum and palladium does not have much influence on the funds’ performance.

Futures Market

All precious metals can also be traded directly in the futures market. However, futures trading is highly leveraged and has higher capital requirements than the other options we have listed. It is dominated by more professional players and institutions, making it a bit more complicated for the average retail investor. Nonetheless, there is still lots of information to be found about retail investors operating in the futures market, and we advise everyone interested in this to educate themselves on how it works and the risks involved.

As you can see, investing in precious metals is easy to get started with, and thanks to investment options like ETF’s, you can get started even with just a small amount of capital.

Please share with us in the comments what precious metals you are investing in and why you believe it is a smart choice. Good luck!

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 37 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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  1. Glock

    September 13, 2017 at 1:20 pm

    Great topic but no links to vendors and there is missing option there the “tokenized gold”. Either this article is years old or not updated…

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Trans-Fee Mining: Investigating FCOIN and The Future

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Trans-fee mining’ is a concept utilised by a growing number of projects and exchanges which has not received much in the way of critical attention recently from either mainstream financial or specialist cryptocurrency publications.

The Fall of F-Coin?

Thanks to a company called FCOIN, most of the news which has appeared has been negative. Statistical information regarding the exchange can be found at popular aggregate ranking website CoinMarketCap.

Despite positive coverage earlier this year from the likes of Forbes’ Andrew Rossow, David Hundeyin of our sister site CCN.com wrote more recently that the exchange had been “Accused of Crippling Ethereum Network for Cheap Publicity” with a supposed aim of gaining publicity.

These pundits are joined by community members such as Reddit poster u/ltcisking (along with a large amount of other concurring, Google-topping results), who recently wrote a post aimed at proving such allegations, entitled ‘One of the biggest scams to ever hit Crypto’.

Twitter has also seen its fair share of investor complaints as well, including the following…

As well as the replies to this post,

What is Trans-Fee Mining?

Due to the unusual circumstances in which the ‘trans-fee mining’ sits (being supported by a number of independent projects despite the reputation of FCOIN): it is a difficult methodology to describe.

It builds upon the concept of the ‘exchange token’: which is most often associated with coins such as BNB (Binance Coin), which can be used for staking towards a particular crypto in the exchanges ‘community coin of the month’ program.

The original FCOIN implementation appeared to build upon this vision at first. The token’s value is derived from the fact that it has a stable value, and that it can be used on-platform (like BNB) as a means of purchasing other tokens whilst offering regular returns on investment for long-term holders of the token.

What is FCOIN Doing Now?

FCOIN has issued various statements which appear to support the sentiment behind the claims which they have faced. These include a recent August 14th post, with the telling title ‘FCoin community referendum end and recent plan publicity’.

Highlights of the piece include new objectives such as

“1.Complete and publicize the destruction of the remaining unissued FT.
“2. Complete the delivery of all FT warrants and withdraw the FT warrants from the market…
“4. As of the end of the referendum, the previous trans-fee refund will remain unchanged (based on the price of the FT related trading pairs before the suspension), and then, all the trans-fee refund will be stopped (including all return plans based on FT issuance).
“5. We plan to establish an FCoin mechanism and an announcement cleanup team. The team untied and improved the current FCoin mechanisms and standardized the release of various mechanisms in the future, and made a unified interpretation.”

At best, this may be an admission of fault, and at worst: an ambiguous and uninformative piece of messaging which fails to outline the situation with a strong brand or executive voice.

This comes in addition to a couple of announcements regarding ‘compensation planning’ with regards to investors who had “participated” in the fundraising of the ‘GU’ and ‘QOS’ tokens through their service.

The latter included the assurance that this process “compensation plan is an initiative taken by the platform to protect the interests of community user” concluded with the damning statement that:

“The FCoin platform has informed the QOS project parties and urged them to conduct self-examination of market price fluctuations and recent media reports as soon as possible. It is not excluded to take delisting and other related measures. The specific plan will be subject to the subsequent announcement. During this period, QOS will be temporarily suspended.”

Torch-bearers of Trans-Fee Mining?

Various claims of discrepancy against FCOIN’s actions as a company however, have not discouraged many projects which are attempting to build their own version of trans-fee mining. Whether or not they have been inspired by the short-lived success of FCOIN’s implementation is yet to be confirmed!

One of the most recent organisations which has decided to foray into this difficult and all-but-controversial territory is BitMart, an exchange founded by current CEO Sheldon Xia. Their approach is branded ‘Mission X’, and utilises their proprietary ‘BMX’ token.

“All transaction fees from the BMX market will go directly to the users who supported the project. In addition, successful projects will enter BitMart’s main trading markets.

“This program gives users the ability to decide which projects they want to be listed on the exchange, creating a self-regulated market.”

The platform piqued this writer’s attention upon noticing a disparity between public consensus and professional news coverage. Whilst the latter has published next to nothing with regards to the platform, a quick search of social media and communities such as forums seem to illustrate a positive and transparent image.

CoinEx was recently reported to have achieved unprecedented growth following the release of their token – however, like FCOIN have been called out for discrepancies. This time regarding the faking of volume metrics.

Final Thoughts

It appears that trans-fee mining as a concept is a long-way from earning this writer’s confidence, however it must be noted that there are many promising aspects. Time will tell whether talent will shine through or if trans-fee mining will fade out at the hands of opportunists.

What is important to note is that it is not the technology or idea, but the hands that are operating the machine incorporating it.

This writer cannot directly recommend the concept in its current state, but believes that the original idea is solid and if implemented in a viable way: would thoroughly warrant the full attention of any potential investor.

Until then, watch the community and keep an eye on the media – as well as word-of-mouth as this flawed-yet-promising idea is if nothing else, highly interesting!

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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My CFD Journey: 72,000 USD Up Today

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Wow the indexes are falling globally now. Dax is down with 1% today – same as Dow Jones. I would love to do a short call on these indexes, but that have seriously hurt my financial standings previously since we still are in a “bull” market with earnings reports beating forecasts and macroeconomic numbers excelling analysts viewpoints. I only want to trade by using trend following, so even if the markets are down, I love to do short buy calls as they most likely will rebound to new ATH (all time highs). The reason for just doing short buy calls is that we might be on the tipping point to a bearish market, but that’s something I would like confirmation on from e.g. macro numbers, earning reports and such. Until then, I’m quick in and out.

Here is my results

Order Entry Price Take Profit Stop Loss USD Bank Roll USD % Change
Start 258 064,52
Day 1 25.01.2018 Dax Buy 13268 13274 13262 6 472,52 264 537,03 2,51
Day 2 26.01.2018 Dax Sell 13342 13318 13392 7 642,84 272 179,87 5,47
Day 3 29.01.2018 Dax Buy 13331 13336 13313 12 508,39 284 688,26 10,32
Day 4 30.01.2018 Dax Buy 13226 13233 13176 6 625,94 291 314,19 12,88
Day 5 31.01.2018 Dax Buy 13217 13230 13187 26 474,06 317 788,26 23,14
Day 5 01.02.2018 Dax Sell 13291 13265 13327 10 834,58 328 622,84 27,34
Day 6 02.02.2018 Dax Buy 12797 12825 12772 72 314,97 400 937,81 55,36

Using ProRealTime

As I wrote yesterday, I’m using IG.com to trade CFDs. They got a tool called ProRealTime that I started to use yesterday. It’s a great tool with many more indicators and tools, and best of all, you get a good look at your stats. Here is my stats so far on ProRealTime in NOK (1 USD = 7.65 NOK – click on the images to get a larger view):

As you can see from the image above, I got 8 winning trades and 1 losing trade. I tried to buy the dip on Dax but managed to enter a bit too early. The Dax index fell quite rapidly after I initiated this trade and I wanted to keep it open as long as possible as I knew a rebound would happen. But I was not comfortable enough to sit it through so I closed it. Still feeling certain that the price would rebound I entered a buy position yet again at what I thought would be the lowest low. And thankfully, that worked and it rebounded above my initial entry point for the first trade. To ensure that I got the profits I wanted, I did a third trade buying Dax when RSI showed a trend reversal (rose above 50). I closed the trades once I was happy with the profits and because I became nervous that the price would turn back down. Then I initiated the last trade of the day going long on Dax yet again.

Here is the total overview of my trades today:

I would again like to highlight that trading CFD is very risky, and I’m still significantly down in total these last 3 years.

My trading rules

  1. Only risk max 2% of my bank roll per trade.
  2. Have 0 active positions during the night (first of all, I lose sleep, second; you are charged an interest fee for leaving a leveraged product overnight.)
  3. Always trade on last month’s trend including the previous day(s). If they do not correlate, I will not trade.
  4. If one position is lost, I’ll double the amount (martingale) and do a second trade. I’ll only stop doubling after 3 consecutive losses.
  5. Do not think about lost trade opportunities.
  6. Markets to trade: Dax & Dow (minimum spread).
  7. Stay updated on economic releases prior to entering a trade.
  8. Do not have emotional ties to the money. I like to call them “points”.
  9. Only enter a position when an asset is overbought or oversold shown by both RSI & Stoch at the same time.
  10. Always write down your trades and elaborate what went right or wrong.

What is the meaning of this?

Why I’m I writing all these posts? My main goal is to find a working strategy trading CFDs and be able to mentor Hacked.com members and do live sessions together. However, I would like to keep going for at least one month until I feel comfortable that the strategy I have, actually works. I would rather lose my own money, than lose any of yours.

I wish you all a great weekend. We are going to visit our family this weekend and have a nice time.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Who Moved My Cheese?

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It’s been a while since I wrote a post. I’ve been busy with creating CCN.com and migrate CryptoCoinsNews.com over to the new domain with a fresh design. And It’s been Christmas with daily family dinners. I decided to quit my job at Wilhelmsen.com as a Digital Trainee. I’ve worked there for a year now, and with the growth of CCN and Hacked.com I had to take a choice. I want to make CCN and Hacked to one of the strongest crypto sources and our team is rapidly expanding. We are now more than eight full time employees and more than 20+ as part timers.

I also bought hvy.com in December, and I want to develop MoneyMakers.com into something more during the coming year. We are building a small media empire with a very decentralized structure. I love the team, and I especially love our dedicated readers and members.

I started 2017 by posting the following:

  1. My own longterm goals, what are yours?
  2. Join me to my first goal of $1 000 000
  3. My First Investment Towards $1 000 000

What is a bit ironic, is that I reached my “longterm” goal last year. It should have taken at least ten years, but I managed it in one. I managed it because of a few things:

  1. Dedication
  2. Team work
  3. Luck

Who would have thought that the crypto scene would blow up like it did last year? It was insane, and we still keep setting records.

Then to a few “lost activities” on hacked.com. The 33% club lost some steam this fall, purely due to my priorities at that time. I’ve still been investing, and I now have approx. 1 million USD in different assets (not cryptos). I will continue the 33% club from February and onwards, and I want you all to join. I will do a new post later in January with a better setup.

Then to my “Robot” affair. First weeks I made $5000, but then things started to go terribly wrong. I had multiple issues with using robots on MetaTrader 5 (I used Roboforex as my trading platform). One of the main issues I found was that the robots did well on certain days, but then when they made the wrong moves, I lost twice of what they originally made. And sometimes, my VPS went down and the orders were stuck until I manually exited them. Mostly with a huge loss. I do not think there’s any good robot out there where you can just leave your money and “forget them”. I’ve decided to focus more on investing my money in secure assets, stocks, indexes, and bonds. I’m still looking for the golden opportunity, and once I find it, I’ll share it with all the members on hacked.com.

Who Moved My Cheese?

I read a short book here the other day called Who Moved My Cheese? and it’s really worth reading. It’s stupid simple, but it’s so true. Basically it says that people who are stuck in the same patterns will end up depressed and “broke”. Your “cheese” or “money” will always be fluctuating, you have to chase it to new grounds. You might think that you can work for your employer until you die, but that will most likely be a terrible mistake. To believe that what you have now will be lasting forever. Successful people manage to change quickly, spot new opportunities, and move forward with their lives. I personally have experienced being stuck for a while, but now I feel free and I want to keep chasing the cheese in new arenas or mazes. Risk and failures are a part of your learning curve. Same can be applied in so many aspects of my and your lives. I recommend reading that book.

After I’m done 31st January at Wilhelmsen (my regular 9-5 job) I’ll focus more on Hacked.com and its community, and I’ll definitely write more and share my thoughts with you.

Thank you for a great 2017, now let’s make sure 2018 becomes even better for all of us.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

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