An Interview with Mukarram Mawjood
As we are navigating the pre-vaccine era there are a lot of questions coming up, especially when it comes to our finances and our future. Where should we be putting our money? How can we be using the pandemic in a positive way? When will things be normal again? Recently we have seen the stock market doing very well and this is largely because people are betting on what they think the world will look like in 6 to 8 months from now. While the stock market is doing well for much longer term goals, what can we do now? Purchasing physical precious metals may just be the thing to diversify your portfolio and take advantage of the current situation but how does one even start with precious metals? We thought we would ask Mukarram Mawjood, our head trader here at Bullionite, for some info and tips for entering the precious metals markets.
Q: First things first, how do we even invest in precious metals?
Mukarram: The two most popular ways to invest in precious metals are through buying stocks in mines and buying physical precious metals. While both are popular and I have traded both, I most like investing in physical metals. The reasons for this is because when you are investing in the metals, you are just investing in the performance of the metals and not the politics of a publicly traded company.
Q: What do you mean by the politics?
Mukarram: See the thing is, the metal can be doing awesome, but if the mine is having issues in management or leadership or has some sort of environmental issue then their stock will not be performing well, even though the metal is performing well. I think of the issues with BP when they had their oil spill in the Gulf. Oil prices were already going down but they suffered even more because of their CEO not relating to the public properly. The same can be true about mines.
Q: Ok, so if I were to invest in gold or silver, how does it work? Do I actually get physical gold or silver?
Mukarram: Yes! You are actually investing in bars and coins that will be stored in a depository or in your personal possession.
Q: Wow! So what do the coins look like?
Mukarram: Well it depends on the types of coins you are investing in. There are Gold American Eagle coins and collectable coins, and both have their perks. Gold American Eagle coins are considered currency so there is no 1099 requirement which is a huge bonus. There are also collectible coins which have a double value. Not only are they worth their weight they also hold a value as a collector item which sometimes surpasses the value as bullion. We tend to recommend collectible coins for longer goals.
Q: Ok, so we understand the different ways to invest in metals, but why do you personally like investing in metals?
Mukarram: Well, metals fit my philosophy in life. For me, I don't like to have a lot of debt or leverage so metals really fit well in my lifestyle. It is a tangible hard asset with value in and of itself. It is more than just a share of a company, it is a thing of value. Hard assets are not affected by irrational monetary policy like currency and stocks can be. Just look at the last ten years and how government’s print more money and create crazy debt with no regard for future generations. Metals are not victim to these issues, you are protecting yourself and your assets from these irrational policies when you invest in metals.
Q: Metals sound like a great investment! But I am struggling with the current situation in the pandemic and I don't think I have the money to invest in gold, what can I do with small amounts?
Mukarram: While it is true that I recommend gold for larger investments, say over 10k, you can still get into silver, which is always valued much lower but moves with the gold markets. That way you will have more physical metals and get more value for your money.
Q: Really? But what if I need the money? I don't have years where I can go without seeing my money.
Mukarram: You should never be investing money that you absolutely need, but if you are ok with not seeing it for 6 months we can usually help you navigate a great entrance and exit of the market.
So metals really are available to everyone who is ready to make investment and understand the risks associated with investments. Thank you so much for your time today, Mukarram! I will be catching up with you next time to find out where you think gold is going in the COVID era! Reach out to us at info@bullionite.com with any questions or comments!