title:Investing in Precious Metals and Diamonds author:John Mussi source_url:http://www.articlecity.com/articles/business_and_finance/article_6315.shtml date_saved:2007-07-25 12:30:08 category:business_and_finance article:

Finding the right investment opportunity isn’t always easy? with all of the different investment methods available it can be quite confusing attempting to find the investments that will generate the biggest returns with the lowest risk. If you’ve never considered making investments in precious metals and diamonds, they might be just the type of investments that you’ve been looking for.
Precious metals and diamonds generally offer a lower risk than some other investments and tend to have decent to good returns throughout the year.
Why precious metals and diamonds?
For nearly as long as history has been recorded, there has been a special place set aside in both society and the economy for certain precious metals and diamonds. Wars have been fought over them, and the value of these metals and diamonds have remained consistent through financial disasters that have brought the values of other items crashing down. While the modern values of precious metals and diamonds may fluctuate, it is unlikely that they will suffer from any decrease in value that won’t be corrected with just a little bit of time.
How to invest
When investing in precious metals and diamonds, it’s likely that you’ll be purchasing shares of the gold, silver, or diamond index. These indexes are traded with other indexes such as technology and other industries, and represent somewhat of the average price of the metals or diamonds across the market. The prices for shares of these indexes may be slightly higher than what you’re used to paying per-share for your investments, but when you consider what you’re investing in it’s easy to understand why. It’s generally a good idea to invest small amounts over a period of time, so as to build up your shares without having to pay the full price for shares at once.
Choosing when to invest
If possible, purchase your index shares while prices are at their lowest? this can be hard to determine at times, though summer months may show a slight decrease in price as they are in between the holiday seasons that tend to drive gold, silver, and diamond prices up. As with any investment, it’s a wise idea to take the time to research performance and pricing before making your investment.
How to handle price fluctuations
As with any investment, the price of your precious metals and diamonds shares are going to fluctuate. It is generally best to simply ride out the fluctuations, as it isn’t likely that prices will stay low for any long stretch of time. It is likely that prices will begin to increase during the winter months, as Christmas and other winter holidays tend to cause a significant increase in the jewelry market which in turn fuels the precious metals and diamond markets.
Precious metals and diamonds as part of a diverse portfolio
If using precious metals and diamonds as a tool for diversification in your stock portfolio, it’s important to remember that they will add a degree of stability in addition to being additional investments. Gold, silver, and diamonds will help to balance out any losses suffered in other sectors, and are not as likely to suffer from losses themselves.
Making significant investments in these indexes can help to provide a little bit of a safety net if you wish to invest in higher-risk stocks, or can be a strong money-maker if you prefer to have a variety of low-risk stocks and bonds in your investments.

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