Palladium – A Fogotten Precious Metal

Palladium – A Fogotten Precious Metal That Is Rising In Value

Single palladium ingot on stacked rows of shiny palladium ingots or bars background - precious metal or money investment concept, 3D illustration

Traditional retirement accounts are plagued with a variety of risks. Whether it’s a risk of economic collapse or the risk of a company going bankrupt and defaulting; unexpected problems can cause your investments to lose their value in the course of a single night. Luckily, there are certain measures you can take to protect your investments and cover the potential risks. One method that you can utilize is investing in precious metals.

Precious metal investments have been utilized by experts for decades for several reasons. One common way to do this is through a precious metal IRA. This is a special type of IRA that is capable of handling various assets that a traditional IRA cannot manage.

Many people invest in precious metals as a way to protect themselves against inflation. Over time, the value of the dollar slowly declines. Meanwhile, the value of gold and other precious metals increases at a similar, steady rate. Thus, by placing significant investments in precious metals you can ensure that your investment does not depreciate as the dollar loses its value.

Precious metals can also be used to avoid many of the risks that affect traditional investments in stocks and bonds. For example, the two major risks discussed at the beginning: the risk of economic collapse and the risk of a company going bankrupt. Neither of these two scenarios would negatively impact the value of your precious metals. In fact, the value of precious metals often increases during a financial crisis.

Palladium – A Forgotten Precious Metal

Gold, silver, and platinum are the assets most often mentioned when discussing a precious metal IRA. However, there is a fourth precious metal that is less well-known but significantly more valuable. It’s known as palladium and its popularity is on the rise (alongside its value).

Palladium is a shiny, white metal that is a part of one of the six different platinum metal groups. It is an extremely rare precious metal with a limited supply that has not increased much in recent years. However, the demand for palladium has increased dramatically. This increased demand and limited supply have caused its value to skyrocket. In 2020, the value of palladium rose by 18 percent. It’s estimated that the supply will continue to be short of the demand for years to come.

Why Is Palladium So In Demand?

Palladium recently stepped out of obscurity and into the spotlight because of its usefulness in the automobile industry. More than 80 percent of all mined palladium is used in the auto industry. Specifically, it is used in vehicle exhaust systems to convert toxic byproducts into vapor and carbon dioxide.

Most cars that use palladium in the exhaust system are manufactured in the United States and China. Other countries still rely on platinum to perform a similar job with less efficiency. If these other countries begin using palladium in their vehicles as well, then the demand and the value will spike even further.

The other 15 percent of the palladium mined finds its way into industrial, electronic, and medical industries. It has a particularly high melting point of 2,831 degrees Fahrenheit, it does not react with oxygen, and it is resistant to corrosion. These properties make it an ideal material for a variety of intense industrial processes.

Investing In Palladium Is A Smart Way To Diversify

Any financial advisor will tell you just how important diversification is for a retirement account or general investment portfolio. If all of your investments are in one particular asset then you risk losing everything if that asset tanks. That’s why it is so important to split your funds among a variety of different assets with different risk levels and return rates.

Most advisors would recommend that you put up to 10 percent of your funding into precious metals. You may then split that percentage between palladium and a secondary precious metal like gold. Having a balance of gold and palladium is ideal because one tends to increase in value when the other drops. The two metals help cover the other’s risk while also protecting against inflation.

Don’t Let Your Savings Remain Underutilized

It’s not uncommon for people to dump their savings into their company’s retirement plan and forget about it for decades. But the sad truth is that these investments are highly underutilized. They rarely make any changes to these investments and the company doesn’t work with an investment strategy that benefits the worker. A much smarter and more efficient method would be to put those savings into a precious metal IRA.

The biggest advantage would be the range of control that you have over the account. You can still invest in traditional assets, but you can also now invest in precious metals like palladium. You can hedge against inflation and other risks that could deplete a company retirement account. A precious metal IRA gives you the chance to take control of your financial future and fully utilize your hard-earned savings.

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