Precious metals are always a substantial investment, regardless of which direction the markets move in. Not only can these assets retain value, but their price can also increase. Silver, while often overlooked in favor of gold, remains an excellent investment option.
Why Invest In Silver?
Unlike gold, silver is a far more accessible precious metal to invest in. The lower price point makes it easier for anyone around the world to enter this market. Although one can apply the same to gold – through buying small amounts – silver seems to have a certain gravitas to it. It is known as the “poor man’s gold”, yet it can still perform adequately on the market.
Additionally, both silver and gold share several similarities. They are both globally recognized as an exchange of value. It is also one of the few forms of “true money”, as it cannot be printed on paper and given an artificial value. Instead, it needs to be dug up out of the ground, refined, smelted, and turned into a more useful shape.
The Traditional Benefits
One can attribute several key aspects and benefits to silver. These apply to gold and some other precious metals as well. It is pertinent to keep them in mind, especially when a potential investment is looming.
- While owning physical silver, there is counterparty risk and no need for intermediaries to honor a contract or promise.
- Silver has never been defaulted on, unlike most fiar currencies, as well as individual stocks and bonds.
- Silver remains more prevalent when it comes to using it for physical money, much more than gold.
Practical Aspects To Consider
Everyone knows silver is a cheaper and more accessible investment than gold. At the same time, it is also a lot more practical to sell. Whether it is silver coins or bars – for collectors’ purposes or otherwise – there is always a market to explore. Buyers of coins and bullion bars are found all over the world.
Furthermore, this precious metal makes it easier to liquidate in smaller stacks on one’s portfolio and mind. For example, if you own one physical ounce of gold, it is impossible to sell less than that ounce. With silver and its different denominations, it is easier to manage how much needs to be sold to make ends meet.
One extra practical benefit is how central banks pay less attention to this precious metal. The majority of financial institutions focus solely on gold. This approach is a bit strange, as silver is a standard product for various industrial purposes. If those needs keep rising, governments will not be able to meet demand. This is good news for investors, as silver’s price is likely to increase at that time. Considering how silver ming supplies are seemingly decreasing, this shift may occur sooner rather than later.
Don’t Dismiss The Potential Downsides
If silver only has upsides as an investment, its value would not be below $30 per ounce. As is the case with any investment, there are some potential drawbacks to take into account. In the end, it all comes down to whether investors have the correct mindset at all times.
- Properly storing physical silver is crucial. This applies to gold as well, as it is not something to leave around the house for anyone to grab. Securely storing precious metals can incur an extra cost and provide better peace of mind.
- Unlike gold, silver tends to perform less spectacularly. It will often retain its value better, but any uptrend is often slow and steady. Throughout 2020, silver’s momentum has been more bullish than in recent years. It may be an exception rather than the new normal, though.
- Never overlook premium prices for physical coins or bars. Mostly when dabbling in collectibles, the costs can often be much higher than silver’s spot price. One can charge a similar premium when selling again, however.
Silver is always a worthwhile investment, assuming investors do their research and have the correct mindset. This is not a get-rich-quick asset, but one that is more than capable of retaining value during economic uncertainty. As the year 2020 has shown, the silver price can rise spectacularly as well.
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