Especially in the current period, investments in precious metals and stocks are more popular than ever. If you’re a newbie to this field, you’ve probably wondered what the difference is between precious metals and stocks.
In extremely simplified terms, the difference can be described like this: The main difference between these two types of investments is that shares fall under the classification “equities”. The owner of a share, also called a shareholder. In this way, he owns a tiny part of a company that has issued this stock for their company. Shareholders increase their wealth when the company in which they hold an interest generates more profit or otherwise improves their business situation, which leads to increased demand for shares in the company and drives up the price of their shares.
Precious metals belong to the category of “commodities”. This means that the holder of the precious metal owns an actual physical product. Precious metals investors make money when the demand for precious metals increases, which increases the value of their shares.
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