Platinum Stocks

Precious metals are on the rise, and many investors are creating another gold and silver rush. However, there are other types of precious metals that are on the rise as well. Platinum is another type of precious metal that investors can take advantage of during times of inflation. It can be used as a means to retain value much like gold and silver. There are two different ways that investors can invest in platinum. Investors can either purchase platinum bullion in a physical form, or they can purchase platinum stocks. Platinum stocks are a way for investors to invest in platinum without having to buy it in a physical form.

Platinum stocks are primarily used for long term investment strategies and a way to hedge against the dollar. One of the only factors that really impact a platinum stock only deals with miner strikes or other complications with a platinum mining company. Before investing in platinum stocks, the investor must first take a look at what companies offer platinum stocks, and compare them side by side. The recent growth in platinum stocks has created an abundance of opportunities to investors who are reminiscent of the gold and silver movement.

One advantage of investing in platinum stocks over purchasing physical platinum is dividends. While the investor is earning capital gain with platinum stocks, they are also earning a dividend as well. Owning physical platinum stocks only provide capital gains to investors and not dividends. If the particular platinum mining company sees growth, the investor will see growth in both dividends and capital gains. The only disadvantage to purchasing platinum stocks over physical platinum is the uncertainty of how much platinum any company is actually holding. In other words, a company may sell platinum stocks that may not be backed up by platinum.

Platinum ETFs can also be invested in as well as platinum futures. The rarity of platinum may create a certain amount of stress on the markets. Platinum is rarer than gold, which is why platinum is worth more per ounce than gold is. The amount that platinum stocks have raised over the past 20 years is staggering. In the 1990’s, platinum was worth around $400 an ounce. Now, platinum is dancing around the $2,000 mark figure. A number of reasons have caused this growth. Both the rarity of platinum and the falling value of the dollar have created opportunities to investors.

Investors who are looking for alternative ways to diversify their portfolios will look towards precious metals. Not all investors take advantage of platinum stocks. Most deal primarily with gold and silver but the amount of opportunities that platinum stocks make available to investors should also be taken advantage of.  As gold, silver and copper rises, so does platinum. In fact, platinum is just as valuable as gold and silver when it comes to investing in precious metals. Platinum sometimes is considered underrated and over looked because most investors are spending their time focusing on gold and silver.

Investors are encouraged to take the time to find out all the mining companies that deal with platinum. Research the company’s backgrounds and see what company provides a proven track record that is stable. Platinum is moving at such a fast rate that it is now being used for even short term investment strategies. Platinum will continue to spike especially when platinum stocks are being traded in bullion form. Investors should pay attention to the movement of the PPLT, also known as platinum ETF. This exchange-traded fund is driving the price of platinum stocks up even more. As inflation rises during the rest of 2011, platinum stocks will continue to earn capital gains.

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