Before investing in any particular asset, it would be wise to check the market and read up on the state of currencies today. Any first-time investor should consider the option that fits their needs best. So it is natural to wonder if you should invest in silver, gold, virtual currencies, or others.
With the dollar continuously decreasing in the last few years, it seems like precious metals make a sure asset that maintain their purchasing power in time. Moreover, silver especially is now a sure candidate to take advantage of industrial demand, despite its volatility in the past. So, in this article we will be looking at potential pros and cons that are meant to answer one question: should I invest in silver?
Should I Invest in Silver Only?
Owning assets of precious metals is a smart move. However, financial advisers stress the fact this it should not be the only move. Silver assets should not be the entire focus of a portfolio but rather an addition to it. They’re a volatile asset mainly because of the fluctuations in production and use. And because silver’s so volatile, it might discourage potential investors or trick them into buying silver when it’s high on the market and selling it when it’s low.
Although silver is considered a safe haven, its great uses make it much more sensitive to the industrial cycle. So, while the dollar might continue to fluctuate or decrease over time, physical metal price will continue to rise and hold value. It’s important to take notice of these issues if you want to invest in silver.
Silver During a Potential Economic Crisis
In the case of a financial collapse, physical metals would be the primary currency used in exchanges. What makes them reliable is their durability, their historical value, and their convenient uses. And because metals are reliable currency, services would occupy the second spot. As such, the holder of physical metals can establish their value in accordance with the type of service or goods they require.
Silver, thus, certainly remains an investment regardless of inflation.
Ending the Debate: Why Should I Invest in Silver?
1. Physical Metal
- Silver is available in both coin and bar form that can be sold in various sizes and formats by the dealers. The bars are made of pure silver almost entirely.
- The coins, however, are valuable only according to the amount of silver they contain. If you wish to invest in silver only, then avoid buying collectible coins.
- Owning the physical metal helps you directly track the price of silver on the market. However, you do have to pay extra when buying the metal from the dealer and sell it at a discount if you want to sell it back to your dealer. Be sure to check recommended dealers beforehand do avoid scams.
- In addition, if you want to store the metal, it might involve some planning and extra costs. At the same time, trading frequently is costly as well so, in the long run, you might want to consider if your current funds allow you to try this option.
- Another option is, of course, buying silver exchange-traded funds, where each share is representative of a certain amount of silver. The prices are tracked accurately through indexes and shareholders charge expenses at a fairly reasonable price. One trusted source is iShares Silver Trust, under the symbol SLV.
- As with owning the physical metal, ETF shares can trade at either a premium or discount price compared to the actual price of silver. But it is a very quick way to participate and observe the movements on the market.
- Moreover, you should consider is buying shares of companies that mine silver. These shares follow the rise and fall of silver on the market. However, if the silver mining company performs poorly, the market will not suffer from drops. It is only the company that will suffer the penalties. This is an unforeseen risk that you need to assume.
- You can also buy shares of companies that stream the silver. Because these companies offer finances to miners, they get back streaming interest. These companies also buy the asset from their partners at a discounted price. So, as with the share of companies that mine silver, the stocks follow the curve of silver on the market.
3. But Which Option Is Best?
It’s been argued that owning the physical metal is a better way of reaping a profit. While shares have a high level of liquidity, the physical metal has historical value.
It had been used as a currency in the past and it has great industrial uses. So, it is a great investment even in an uneven economy. However, silver has been historically volatile so it’s a fairly big disadvantage to consider.
Overall, paper money will always fluctuate according to each government. Taking into account the previous severe financial crises, there is always the possibility of a collapse in the future. At the same time, the historical value of silver and its durability in time, make it an investment that will hold value internationally. Currently, silver is in demand for its industrial uses and for trading purposes.
If you want to keep up to date with the value of silver, look for the spot price on sites such as NASDAQ or COMEX. The spot price shows the price of silver at that exact moment so you can sell, buy or trade accordingly. If you want to invest in silver, the spot price must be verified beforehand. Check the charts and look for a reliable trader.
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