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As more people focus their retirement savings investments on using wealth preservation strategies, you can’t help but hear about the potential benefits that investing in precious metals can provide. Precious metals don’t behave anything like stocks or bonds, but they’re not exactly currency, either.

At least, not in the way we’re used to thinking about them, anyway.

Like all investments, investing in precious metals does entail taking on a certain degree of risk. However, unlike stocks or bonds, you won’t have to worry about gold prices going to zero. Like, ever.

That being said, here are a few facts for you to keep in mind that although precious metals are generally seen as an insurance policy against a potential decline in the economy, these types of investments are not suitable for everyone.

Keep on reading and see for yourself if owning precious metals in your portfolio makes sense for your particular goals and needs.

1. The price risk.

So we know that unless there is some sort of word-transforming or cataclysmic event, that gold is unlikely to hit zero in the foreseeable future. In the investment world, gold is seen as a safe haven during hard times. That, however, doesn’t mean that gold doesn’t have its price swings which could give investors some pause.

A brief tour of the history of gold prices can help illustrate the behavior of the price of gold. For example, prior to the Financial Crisis of 2007/2008, the price of gold was hovering at around $630.00. When the crisis hit, gold shot up to around $870.00.

In 2011, the price of gold hit $1,880, its official all-time record high. Fast forward a couple of years to today and we now see gold at around $1,469.00 an ounce. So while the last 10 years have shown an overall price appreciation, you can expect to go through some down years along the way.

2. You own actual gold.

Unlike stocks and bonds which you hold paper certificates as proof of ownership,when you invest in precious metals, you actually get the real deal: bullion coins or bullion bars. Needless to say, it’s probably not a good idea to stash these under your bed for a rainy day.

Instead, you get to store these physical assets at your local bank in a special vault or some sort of safety deposit box. The extra precautions and storage requirements will raise the costs of storing these assets for sure. In other words, these assets are best used for a long-term investment.

3. Precious metals are illiquid.

Investing in precious metals makes for lousy short-term trades (hint: you’ll probably lose money) and selling them when you no longer need or want them can potentially take longer than you would like.

In other words, if your investment in precious metals ties up some of your emergency funds, you’re probably better off investing those funds in a more liquid asset.

Precious metals tend to be harder to sell than normal stocks or bonds positions particularly if they are directly held (like we’re discussing here) but if you’re mainly dealing with gold and/or silver, it won’t be as much of a hassle.

Keeping these risks in mind can you help you better plan your retirement savings strategy so start thinking about investing in precious metals today.