Kitco on the Benefits of Investing in Precious Metals and Avoiding Credit Card Dependence

In a Nutshell: Credit cards offer a ton of benefits, including convenience and appealing perks. But they are meant to be used wisely and should not serve as a financial safety net for consumers. Maintaining an investment portfolio is a more sound approach for building up funds for a rainy day. Kitco is a company that facilitates the purchase and sale of precious metals, a key component to a balanced and diversified portfolio, according to the company. Kitco is also an authority on the latest news and developments in the world of precious metals. Having been in business for nearly 40 years, the company is a trusted and dependable source for all things gold and silver.

We all make mistakes when it comes to finances. When I was much younger, there were times when I didn’t have a financial safety net to fall back on and relied on credit cards to get me through tight times.

And, of course, credit cards are great for a number of reasons, including convenience and perks. But credit cards must be used responsibly or else people can end up in serious debt. And once credit card debt becomes unmanageable and bills go unpaid, financial disasters may lurk just around the corner unless significant steps are taken to get back on track.

As an older and hopefully wiser consumer, I now understand the importance of investing — not only in a retirement portfolio — but for a financial safety net. And for those who are particularly savvy, investing can become a second stream of income or even a primary source of income.

But many Americans don’t have any safety net whatsoever, and an unexpected expense of just $400 would put nearly half of U.S. residents into further debt.

Additionally, only the most affluent members of society have typically invested in secure assets such as stocks and bonds. But thanks to advances in technology in recent years, that barrier has been lowered to allow nearly anybody with an internet connection and bank account to start an investment portfolio.

And, while the term investment portfolio may conjure images of the Nasdaq ticker with stock symbols and corresponding prices, in this article we’re going to take a look at one of the world’s oldest investment assets — precious metals.

To learn more about the ins and outs of investing in metals, including gold and silver, we spoke with Peter Hug, Global Trading Director at Kitco, one of the world’s largest online retailers and full-service providers of precious metals.

Hug discussed the origins of the company, what Kitco offers consumers — from asset trading to industry news — and why it’s important to keep gold and silver in mind when it comes to a diversified investment portfolio.

While some people push investing in silver and gold as a safety net in case the economy fails or some other catastrophic event occurs, Hug said that’s not why he invests in precious metals. It’s simply because assets like gold and silver are an important part of a balanced portfolio.

“Most of my focus has always been on the precious metals market, and I have never been one of those guys that says, ‘The world’s coming to an end and you need to buy gold because it’s going to be $20,000 an ounce,’” Hug said. “That’s just not in my chemistry.”

Instead, Hug said he views precious metals as an investment asset just like stocks and real estate are important investment assets. His views are formed partially from having been involved in asset trading since the 1970s and seeing many trends come and go over the years.

He said that he has always been and continues to be a proponent of a balanced portfolio, but a lot of factors go into considering what works for each person. Some considerations include the investor’s risk tolerance, age, and reasons for investing (retirement versus boosting income, for example).

“It’s individualized — it’s difficult to just say, in general, what everybody should do,” Hug said. “But in the context of the balanced portfolio, I’ve always believed that a percentage — and you can pick the number that suits you — should be in hard assets that are sensitive to inflation, sensitive to interest rate movements, and sensitive to general geopolitical risk.”

For those interested in learning more about investing in precious metals, or even if you’re a seasoned pro and are looking for a dependable trading platform, Kitco serves as a one-stop shop.

“Kitco is the global precious metals authority and retailer of bullion products, recognized as the leading voice in commodities information providing best-in-class news, data, and insights,” according to the company.

Not only does Kitco provide a full precious metals trading platform but its news section offers dependable articles on the latest industry developments.

“Kitco.com is visited daily by millions of people around the world,” according to the company. “Kitco was the first precious metals company to provide investors with real-time market information, news, analysis, and online precious metals services.

The company’s media division is considered an authority on precious metals, commodities, and mining, according to Kitco. It distributes cutting-edge news, market insights, and data to a worldwide audience.

“The Kitco brand resonates globally and our information is consumed by millions on our web assets, applications and social media channels,” according to the company.

While Kitco has been in the business of helping people buy and sell hard assets for four decades, Hug said the company more recently entered the virtual arena as well with its new VaultChain™ platform.

“VaultChain™ is a digital product where clients have direct optics into their account on their holdings,” Hug said. “And the custodian for the product — gold and silver — is the Royal Canadian Mint.”

The service lets consumers buy and sell gold digitally using blockchain technology, which allows for data accuracy, real-time tracking, and transparent auditability.

“A gentleman by the name of Bart Kitner started Kitco as a part-time summer job back in 1979,” Hug said. “He thought there might be an opportunity to go around to the various jewelers in Montreal and make a bid for their scrap that they generate from polishing and filing.”

Kitner’s idea worked. He purchased scrap gold and took the scrap to the Royal Canadian Mint and had it refined into pure gold, Hug explained. Kitner could then turn around and sell what was once just scrap as legitimate refined gold.

It wasn’t long before Kitner brought a business partner on board, and Kitco grew using the business model of buying scrap precious metals, refining them, and selling them.

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“In the early ‘90s, Kitner started to get calls from clients wondering if he would be interested in getting in the market of actually selling investment-grade products — bars, coins — both in gold and silver,” Hug said.

Kitner responded to the market and in 1995, Kitco.com was launched and it eventually became the first company to sell precious metals on the internet.

“That’s how it started, and then he rolled that marketing concept into the U.S. market and set up storage facilities and fulfillment facilities in the U.S.,” Hug said.

In 2008, the company opened its Hong Kong office — followed by a Taiwan office — to enter the Asian market.

Today, Kitco provides its precious metals products and services to customers in more than 80 countries around the world.