There are many ways to invest in platinum, and all categories of
investor can find a way that suits their available capital, risk profile
and timeframe. Here are some of the more popular ones.
Investing in physical platinum
It is possible to buy physical platinum in bullion or as coins. These
are widely available, and a platinum coin can be bought for less than
$100. Smaller investors often buy platinum coins when they desire to
invest in platinum. There are essentially two types of coin available:
Platinum bullion coins and collectible platinum coins. If the intention
is to solely invest in the metallic value of platinum, bullion coins are
more conventient. Collectible coins are often worth than the metal they
are made of, because they have collector value. They can thus be more
expensive to acquire, and their value may not follow the price of
platinum closely At a slight premium over the platinum price there are
other types of bullion available, such as platinum bars and wafers. In
the form of wafers or bars, platinum is less available than as coins.
Investing in small quantities of physical platinum is a good way to make
a small bet in the platinum price. Storage cost is minimal, as the
metal can be kept in the home of a private individual. The metal can
also be insured. By buying from well known vendors, one can make sure
that the platinum one buys is not counterfeit. It is rare to see
counterfeit platinum bullion, but it is not unknown.
For larger investments, say more than about $20,000, keeping physical
platinum at home can be risky and impractical. Both logistics, secure
storage and insurance come into play. For most investors, investing in
platinum by other means is a better, safer and more convenient solution.
Investing in non-physical platinum
There are many ways to invest in non-physical platinum. These entail securities such as platinum stocks, a platinum ETF and mutual funds.
Stocks
Companies that mine platinum are publicly traded on stock exchanges in
several countries. Investing in platinum miners is not the same as
investing in platinum, because individual companies are subject to many
factors, not only the fluctuating price of platinum.
ETFs
A platinum ETF is a fund that owns physical platinum. When you buy a
share in an ETF, you have a stake in part of the platinum it owns
without having to buy physical platinum. This is a very convenient,
cheap and easy way of investing in platinum. At this time, PPLT is the
only platinum ETF that's available.
It's also possible to buy a platinum ETN, which is like an ETF, but
tracks the platinum price by buying platinum futures. In this case, the
investor does not have a stake in physical platinum, and credit risk
becomes a consideration.
You may also choose to buy platinum futures or options on your own. This
can be quite risky, and is not recommended for non-professional
investors in precious metals.
