These metals, increasingly coveted for high-tech uses such as catalytic converters in cars, can help diversify your portfolio and hedge against financial uncertainty.
Before investing in platinum or palladium, ground your portfolio by investing in gold and silver first, Morgan says. "Everyone needs gold and silver," he says. "Platinum and palladium aren't for everyone because markets are smaller. They're nicer to have rather than need."
Why? Both metals' prices can be highly volatile. They're bought and sold via precious metals brokers.
Hold them for at least three years, says Paul Mladjenovic, author of "Precious Metals Investing for Dummies." Platinum and palladium should represent no more than 5 percent of your investment portfolio compared with 10 percent for gold and silver. That's because markets for these metals are smaller, and trading is more limited than for gold and silver.
And don't let swings in metal prices drive your investment strategy. "Speak to a financial adviser about setting a target price when selling," he says.
Platinum regains its luster
Platinum is 10 times rarer than gold, and the tight supply can mean wildly fluctuating prices. For example, platinum hit a high of $2,252 per ounce in March 2008 only to plummet to $794 in October that year. Supply issues in South Africa, where most of the metal is mined, were to blame, Mladjenovic says. "As soon as the problem was fixed, the metal's price dropped," he says.
The metal hasn't again reached that all-time high.
The best way to invest is to buy bullion coins, or coins minted but not used in day-to-day transactions. "You're less likely to worry about the ups and downs in the market," Morgan says. "So you'll hold on to the coins."
U.S. Mint-issued American Eagle platinum coins are one possibility. They're easily bought at banks or brokerage firms. They also can be purchased at major coin dealers. Go to the U.S. Mint website for a list of authorized dealers.
But a less liquid market than gold can mean they're harder to cash in. "Before you buy bullion coins, ask about the dealer's buyback policy," Mladjenovic says.
This shiny metal, which mimics silver, sold for almost the same price as gold in mid-January -- about $1,269 per ounce for platinum and about $1,293 per ounce for gold.