A Look at Derivatives and Precious Metals

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Precious Metals

Man has always had a fascination with precious metals; they're rare and they're shiny -- what more could you want in an investment?

Precious metals are categorized as commodities, along with basic goods like coffee, orange juice, crude oil and steel. Today, they remain a popular investment (and a source of heated argument for many investors).

We're all pretty familiar with a few of the precious metals -- silver, gold and platinum all grace our credit cards, after all. But other metals like iridium and palladium are also very valuable and are bought and sold by investors hoping to hold on to their values.

From an investment standpoint, precious metals trade on the commodities exchanges (and yes, there are precious metal-based derivatives too). But many people invest in precious metals in the form of jewelry or rare coinage. Exchange-based metal investments tend to be much more liquid than their counterparts.

Are Precious Metals a Worthwhile Investment?

There is often debate as to whether or not precious metals actually constitute a good investment. The bottom line is this: While precious metals have not historically appreciated as quickly as an investment in the stock market, they do offer a good deal of stability to your net worth .