As palladium is a relatively newcomer to the precious metals market, the number of ways to invest in palladium open to the palladium investor are few compared to the other precious metals.
Physical Palladium Investments
One way of investing in palladium is to own the physical metal by buying some palladium coins. Small quantities of palladium coins can be purchased for as little as $50 or less.
Buying palladium coins is a common investment approach for the small palladium investors. Two types of palladium coins are available for the palladium investor. They are palladium bullion coins and collectible palladium coins. Palladium investors looking to invest purely in palladium should buy palladium bullion coins instead of collectible palladium coins, which are more expensive as they carry numismatic value.
Palladium bars and wafers are also available and are sold at very little premium above the palladium value but they are not as easily available as palladium coins.
Owning physical palladium such as palladium bars and palladium coins are a good way to make a small investment in palladium. There is also no storage fee involved since they can be kept at home. There is also no risk of fraud unless it's a counterfeit palladium bar or palladium coin. Hence, always check your purchases and buy from reputable dealers.
However, for large investment amounts, it would be quite impractical and risky to own physical palladium as transportation and storage becomes an issue. In this case, non-physical or paper palladium would be a more convenient, safer alternative.
Non-physical Palladium Investments
The modern financial world offers the palladium investor a wide range of means of gaining access into the palladium market.
Palladium Stocks, Mutual Funds & ETFs
A number of palladium mining companies trade in major public stock exchanges around the world. Investing in palladium by holding shares of a palladium mining firm is not as straightforward as buying palladium itself. For more information on how this investment approach works, see palladium stocks.
Alternatively, you can also participate in palladium's long term appreciation by investing in palladium mutual funds or palladium ETFs.
Palladium Options & Futures
For short term speculative bets, you can take up a position by buying palladium options or futures contracts. These derivatives offer leverage to the palladium investor, allowing him or her to control a large position in palladium for a relatively small investment. On the flipside, the chance of losing one's entire investment is high, making them very risky investment options.