What should I do with my precious metals holdings when prices are coming down?

“I was accumulating my Precious Metals investment and now prices are going down. Should I continue or stop?”

“I needed some cash flow but to sell my holdings now puts me at a loss, should I just sell and take the losses?”

 

The above are some of the situations we’ve heard from investors lately. There are various solutions, and we would like to share a few in this article.

 

At the end of the day, it really depends on what your objectives are and which are the most suitable or comfortable for you to execute. Generally, most people accumulate Precious Metals to hold for the long term. Some even use Precious Metals as part of their legacy planning. As such, when prices are down, investors should grab this opportunity to accumulate more holdings which will bring down the average acquisition cost.

 

Another good practice is to allocate a standard investment sum monthly to buy/accumulate consistently (daily). This exercise will help you accumulate more metals when prices are low and accumulate less when prices are high.

 

If you are paying for the storage fee or holding cost, it means your average cost will just keep going up. However, if you continue to accumulate, your average cost may go up or it may stay stagnant.

 

We’ve seen scenarios where investors will decided to sell their holdings and re-purchase with an accumulation plan. This example is considered a little extreme but it does help cut down the current monthly storage/holding cost when re-purchasing at a new lower average cost. This helps investors who may have limited funds and are unable to fork out more for the storage/holding cost, but at the same time, would like to continue holding this asset.

 

For the above scenario, there is another way to approach this which is to collateralise the asset. Investors can choose to still own the asset by collateralising it to get some funding. There will still be some interests’ charges, but at least this method will resolve short-term financing issues. Many have opted for this approach to carry them through tough times or to wait for the prices to move higher to sell at a better rate.

 

We’re just sharing some of the common approaches to managing Precious Metals holdings in the event of falling prices, but these are definitely not the only options.

 

Please feel free to reach out to us and we are more than happy to discuss more with you!

 

 

Suzane