Investing in precious metals offers a wide array of benefits, from acting as a hedge against inflation to portfolio diversification and even protection of purchasing power.

While investing seems daunting, physical assets like precious metals is one of the best investments there is. Here are a few common mistakes to avoid when building your gold and silver portfolio.

1. Attempting to Time the Market

There are plenty of reasons to consider adding silver or gold to your investment portfolio. Price appreciation is one reason but it’s not the only one. Trying to time the market and buy precious metals at a better price may sound like a good idea, but it’s really just a theory. There are very few people that are able to time the market successful while keeping an eye on live prices. When it comes to precious metals, you may want to ditch the buy low and sell high notion and just buy.

2. Unrealistic Expectations

While the price of silver, gold including other precious metals can appreciate a great deal, and even rise quickly, you need to see the forest through the trees, so to speak. Any price appreciation in precious metals should be seen as an added bonus. Your key focus when investing in gold and silver should be the potential advantages as a hedge against geopolitical and economic issues, like deflation, inflation and currency depreciation. While there’s nothing to safeguard the metals climbing significantly in price, never buy strictly in the hopes of a speedy price appreciation.

3. Neglecting to Do Research

Whenever you begin something new, you should always start by doing your homework. It’s all too easy to listen to other people’s advice or browse through a few websites before you begin, but neglecting to take the time to do thorough research may be your downfall. Within the precious metals market, just going over a little general information like spot prices is merely superficial research. But, there is tons of information to be learned about buying silver and gold. If you are serious about investing in precious metals, it really is worth taking your time to do enough research and sift through the information out there. You can also see what is on offer at Citygoldbullion.com.au.

4. Failing to Acknowledge Premium Charges

While you might be excited about your first investment in precious metals, don’t let your excitement cloud your basic judgment as a consumer. If you do want to invest in silver and gold, treat it the same way you would any other commodity and just make sure that you know about the premiums charged for various precious metals.

5. Buying Scrap Silver and Gold

Don’t attempt to buy just anything made out of precious metals. An old coin, a ring or a necklace will become a nightmare when you want to re-sell if for quick cash. Precious metal objects made from scrap is not an investment. Most aren’t pure metal, either. So, do be careful.

Physical precious metals offer a wide range of potential benefits. If you don’t currently invest in the metals, it’s time to consider your options. These 5 tips should help you avoid some of the most common pitfalls.