At Axerian, we take a broad view of the investment world. While investing in stocks and bonds is a good way to grow wealth, we are constantly on the lookout for alternative investments with which to diversify a portfolio. The list of alternative investments is almost limitless, though that is not to say that all are suitable for everyone.
Bearing that in mind, we relish the opportunity to learn as much as we can about any interesting investment of which we hear. So, when we were offered the chance to talk with David Crawford about platinum investing, we were more than intrigued. We jumped at the chance to talk to David and hear about his career in the precious metals industry and, more specifically, platinum and how it has given him such a unique insight into the industry. It is that specialist insight that highlighted to us how platinum was a real possibility for many investors, looking to add a precious metal to their portfolio.
Who is David Crawford?
David is a precious metals expert thanks to both his career profile and education. With a degree in Geology, David became quickly immersed in the metals industry after various positions made the most of the knowledge his BSc provided. With practical application experience under his belt, David was made the Head of Precious Metals at the London Metal Exchange (LME). In this position he lead a winning team that was able to deliver and execute LME’s independent oversight and administration of the London Bullion Market Association (LBMA) Platinum and Palladium Prices auction process, as well as the platform. That meant that an electronic global reference of pricing for Platinum Group Metals (PGMs) was established, replacing the Platinum and Palladium Fixings.
From the London Metal Exchange, he moved on to become a director of the World Platinum Investment Council where he was predominantly in charge of driving new commercial partnerships with leading Platinum brands. One of the more notable being The Royal Mint based here in the UK. In doing so, his involvement helped to lead global market development and the promotion of new products, either that used platinum or how it was sold.
After five years at the WPIC, David then went on to be the director of Business Development at Baird & co. this company is the UK’s biggest gold, silver and platinum merchant which even operates the country’s largest gold refinery. As well as this it oversees the production of goods such as jewellery, but also precious metals investment products and specialist industrial products.
David’s background is so crucial to note because, in doing so, it becomes clear as to why he is such an expert in his field. That expertise has been put to good use in many of his positions, as he brought about change in the industry. Those changes have heightened awareness and enabled platinum investing to become more accessible to many more investors. Thanks to more products being available to purchase, either ETFs, platinum mining stocks or actual platinum coins or bars themselves, more people can make use of platinum as an alternative to gold. Arguably it could be deemed to be better for some.
Crawford’s expertise and knowledge is well-rounded too. His positions have all been in different aspects of the industry thus giving him in-depth insight into every part of the platinum production process. From mining to selling, to implementing the metal into industrial use, David’s knowledge gained from many years of experience makes him a leading expert on the subject.
His views on investing in platinum
So what are David’s expert views on investing in platinum? In short the future looks shiny for platinum’s price. This is in part because platinum is a finite resource which, for now at least, does not have a man-made replacement. In addition, it is used in industry to such a great extent that its limited amounts will always support the metal’s pricing.
David highlighted to us some hugely encouraging elements to platinum’s investment case too. Its usage in the industry, thanks to being irreplaceable, is only set to rise. There are a vast array of industries which use it in critical functions. In the medical arena, it is used within pacemakers and as part of chemotherapy treatment. In the automotive industry, it is used in combustion engines. Those parts will still be used, even when petrol combustion engines start to be materially phased out. David argues that while electric cars do not use platinum, they also cannot be expected to meet the needs of the growing global population. There simply is not the infrastructure worldwide to support charging electric cars to the amount that is required. As a result, people will need to turn to cleaner fuels. Many of which will still use platinum in their engines to run, for example hydrogen fuel-cell vehicles.
Ethically speaking platinum is a responsible way of investing. The mining of the metal is only done by stock exchange-listed companies. The result is that investors are provided with some comfort that there is ample corporate governance in place to ensure that the metal is sourced ethically. That cannot always be said of buying gold, which has often been seen to be sourced in countries where artisanal mining takes place. The knowledge that platinum is not funding militias or corruption, which can be a grey area in gold, is a boon to those seeking to invest responsibly. With the increase in investing ethically and sustainably on the rise, platinum offers a good method to ensure diversification to a portfolio without worrying about ethical issues.
Why seeking expert investment advice is key
Talking with David emphasised an often-overlooked investment rule. That knowing an investment opportunity inside and out is one of the key ways to ensure that you have mitigated against any risks particular to you in your portfolio. David’s thorough explanation of the platinum industry made a compelling investment case not only because the fundamentals are encouraging, but also because it was so clear he knew what he was talking about.
Interestingly, he spoke of how one of the drawbacks to investing in platinum was the lack of transparency that surrounds it. That lack of transparency comes from not having a very big market and, consequentially, there is comparatively far less research conducted into it by investment professionals. That does not automatically mean that lack of transparency results in a less than efficient sector prone to losses and volatility. While that absolutely can happen, his justification of the positive platinum investment case was reassuringly detailed.
While stocks remain a key investment product to help generate wealth, sometimes the size of the stock market can lull investors into a false sense of security. Absolutely all investments can fall as well as rise, and they can fall a very long way, as the current recession has shown us. It is crucial, therefore, to research every single investment to ensure that it fits in with your risk profile and investment outlook. Taking into consideration your own circumstances will help you decide whether investing in platinum or an FTSE100 index, or both, is suitable for you. As for David? Well, when asked whether he practices what he preaches and invests in platinum, the answer was a resounding yes.