In the world of precious metals, copper is often forgotten in the midst of its more illustrious relatives gold, silver, and platinum.
You likely think of copper in terms of electrical wiring, plumbing pipes, or US pennies, as these are common uses for copper! (Although pennis are not made comletely of copper.) Copper does have extreme value in construction industries, which is why scrappers will commonly strip wiring of its copper to resell it.
While copper is not the most common precious metals investment, it can still be a valuable part of your investment portfolio.
SHOULD I INVEST IN COPPER?
Copper can be a very solid investment, but it also has the potential to be more volatile than other precious metals. It has a variety of uses in the industrial space, so its demand is often high, but it doesn’t hold quite the same value as some other precious metals.
BENEFITS OF INVESTING IN COPPER
One of the biggest benefits of copper is that it is almost always in high demand. Copper is used in a variety of industries, such as construction, where it is used to create plumbing pipes and electrical wires.
But copper is also used in the creation of many electronics, which are also constantly being created and developed. As the tech industry continues to grow, so will the demand for copper.
Another benefit of copper is that it provides diversification in your precious metals portfolio. Gold and silver are great investments, but the more you can diversify, the better. Because copper is such a different precious metal than those two, it will diversify your portfolio that much more.
DRAWBACKS OF INVESTING IN COPPER
While copper can be purchased in the form of bullion as coins or bars, it can often be hard to find copper in amounts that are feasible to store in your home or safety deposit box. Copper is often sold in large quantities because of its use in the construction and electrical industries, but that amount is not suitable for the average investor.
MANY COINS NOT MADE OF 100% COPPER
Like the current United States copper penny, many coins are not made of 100% copper. The US penny is made of zinc and copper. The copper gives it its signature penny color, but the majority of the coin is made of zinc. Unlike Gold American Eagles, which are composed of pure gold and therefore have value outside of their status as a currency, many copper coins aren’t worth their weight in copper because they’re not copper.
Another drawback of copper is that its price can fluctuate quite frequently. While this might be a benefit for some savvy investors, for the average investor it provides more risk than reward. The price can decrease just as quickly as it can increase.
At the end of the day, only you can decide if copper is a good investment for you. But hopefully this article helped you better understand if you should invest in copper!
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