118 known elements appear on the periodic table, among them base metals, precious metals and rare-earth metals.  For investors and traders who are willing to think a little outside the box, these metals offer a wide array of opportunities to be explored.  They can have a valuable place in the portfolio of many savvy investors, offering not only the chance to diversify, but also to trade through a range of different vehicles, from stocks to futures, options and exchange-traded funds.

Base Metals

In Chemistry, ‘base metals’ are defined as metals that oxidise or corrode easily.  This grouping includes many industrial materials, such as copper, nickel, aluminium, zinc, lead, tin and iron.

Due to their prevalence and unique properties, these metals are used for a wide variety of commercial and industrial purposes, from plumbing to packaging to the construction of cars.  As demand for these different products rises, so too does the value of these materials.

As they’re so common, the prices of base metals tend to be much lower than other metals, but that doesn’t make them worthless.  Investments can be made in a number of ways, from investing in individual companies specialising in their production to buying into futures and options contracts, and they often prove profitable.

come my tiny metal children by francisco delatorre, on Flickr.  This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic License.

Precious Metals

Precious metals include silver, gold, platinum and palladium.  They are defined by a number of unique features, such as a high lustre and melting point, tractability, and low reactivity.  They tend to be scarce, and because of this they’re very valuable.  Precious metals are commonly used for jewellery, art, coins, dental work, medical devices, electronics, and investment or holding purposes.

As is the case with base metals, there is a wide array of investment vehicles for investors to choose from.  Gold, in particular, is very versatile: some investors choose to physically hold it in the form of jewellery or gold bars; others trade stocks, futures, options, mutual funds or exchange-traded funds based on precious metal holdings.  Gold tends to be a particularly popular investment choice during periods of economic strife due to its proclivity to maintain its value.

Rare-Earth Metals

The category of rare-earth metals includes materials such as lanthanum, cerium, praseodymium and neodymium.  These metals are becoming increasingly valuable due to their growing usage in the electronics industry and technology, and can be found in everything from cell phones to computer memory chips, cameras and e-readers.  They’re also frequently used by the military as a component in night vision goggles, precision-guided weapons and stealth technology.  Although, deceptively, they tend not to be very rare at all, most of these metals are hard to extract and process, which has helped to drive up their value.

Once again, investors can become involved with them through a number of investment vehicles, from shares in individual companies to exchange-traded funds.  This means that there is something suitable for every trader that’s interested in them, irrespective of investment market background, style, or individual preferences.

Why not give in to the glitter of gold, the shine of silver, or the allure of aluminum to diversify your portfolio?