Is Silver a Good Investment?Paul-Martin Foss
For centuries silver, not gold, was the precious metal of ordinary commerce. Numerous currencies, from the mark to the pound to the dollar, were defined as weights of silver. From Europe to China to the New World, silver coins were the currency of choice. Silver defined what it was to be cold, hard cash.
That continuous demand over centuries hasn’t abated, as investors today trust silver just as much as gold to protect their wealth when they really need to. Unlike paper assets that can fluctuate wildly with market conditions, silver’s value remains relatively stable. It maintains its value over time, which is why it forms a central part of so many investors’ portfolios.
Silver is in constant demand from investors, jewelers, and industry. With new industrial uses for silver being discovered all the time, and with above-ground silver stocks continuing to decline, the silver price should continue its march upward for years to come.
In fact, the silver price has gained over 6% just within the past week, in part buoyed by the likelihood of an increasingly dovish Federal Reserve. Professional investors have become much more bullish about silver too, increasing their long positions by 80% as they expect silver prices to continue to rise the rest of the year. And silver exchange-traded funds remain big buyers, increasing their holdings of silver at nearly 3%, over double the rate at which they’re buying gold.
By investing in silver, investors can help diversify their portfolios, hedge against the risk of financial turmoil and inflation, and protect their wealth for years to come. And with a silver IRA they can invest in silver while still enjoying all the same tax advantages as a traditional IRA. The more you learn about silver and investing in a silver IRA, the more you’ll realize the reasons silver is a good investment.
Is Silver a Good Investment?
Unlike paper assets such as stocks and bonds, silver is an actual asset, a store of value. Stocks are a claim to ownership in a company, but if the company fails then your “asset” is worthless. Same with bonds – if the company issuing the bonds goes out of business then you’ll be lucky to get pennies of your principal back.
Silver, on the other hand, is one of the world’s most widely traded commodities. It’s in demand around the world, on commodities exchanges, at coin shops, and online. Just like gold, silver is seen as a final store of value, the ultimate money when paper money becomes worthless.
Just like gold, silver can help protect retirement portfolios against inflation and help investors maintain value during financial downturns. With a track record dating back thousands of years, it’s no wonder that investors continue to trust silver to protect their investments. To answer whether silver is a good investment or not, we must look at some of the most relevant advantages to diversifying your investment portfolio with precious metals.
Silver can protect your assets both in the long term and the short term. While many investors hold onto silver for years or decades to protect their portfolios, silver’s performance during times of financial stress has made it a popular investment target in recent years.
Whereas stocks lost well over 50% of their value during the 2008 financial crisis, silver maintained its value. Even after stocks resumed their upswing, silver continued to gain value, helping boost the value of investment portfolios just when investors needed it most.
Just like gold, silver tends to increase as stock markets begin to perform poorly. And with all indicators pointing to 2019 being another rough year for stocks, that puts silver in position to make some pretty impressive gains for the rest of the year. When stocks are expected to decline in value, silver is a good investment to act as a hedge.
If you’re worried about the value of the assets in your 401(k) account plummeting during a stock market crash, think about rolling over some of those assets into a gold and silver IRA. You can do that tax-free, allowing you to lock in the gains you’ve already made in stock markets and transfer them into silver.
Silver has always played second fiddle to gold, which is easy to understand. But silver can provide an affordable method of asset protection to those who may balk at paying over $1,400 for a single coin. Silver’s low price and favorable price ratio to gold make it currently an undervalued but very important part of any investment portfolio.
Another important characteristic of silver is that it is tangible. That in and of itself provides a useful benefit. As the old saying goes, a bird in the hand is worth two in the bush.
Stocks can rise and fall in value as economic conditions fluctuate, and bonds can fall in price very quickly as the financial positions of their issuers deteriorate. They’re akin to promissory notes, a promise to pay at some point in the future. But that future date may very well arrive and you’ll have no ability to recoup your investment.
With silver, on the other hand, you’ll always have that physical metal to turn to. It’s always in demand and, unlike stocks and bonds, you’ll never face a situation in which can’t find a willing buyer for your silver. For this reason alone, you may consider silver a good investment.
Silver is often referred to as “poor man’s gold.” Its much lower price enables those who aren’t of great means to get their feet wet investing in precious metals. Whereas $30,000 will get you a roll of gold coins that will fit in the palm of your hand, that same sum will buy you enough silver to fill a backpack.
That can make it a little difficult to store, but it can make it easier to sell off in small quantities too. While you can buy smaller gold coins in weights down to 1/10 or 1/25 of an ounce, the premiums you’ll pay are much higher than those on silver. That makes silver the obvious choice for those who want the flexibility to buy or sell in smaller increments than they would have to if investing in gold. And if you choose to invest in silver through a silver IRA, there are numerous IRA-approved silver coins from which you can choose.
Because demand for silver is influenced to a greater degree by industry than demand for gold, silver can offer higher returns than gold. A boost in demand can lead to price increases that, percentagewise, are greater than those of gold. A $10 increase in gold’s price may be a good gain, but a 35-cent increase in silver’s price is triple the percentage.
That’s not an uncommon occurrence either, as during recent bull markets silver rose 448% while gold rose 166%. While gold may get the headlines and the attention, savvy investors know that silver can be just as important an investment to buy as a hedge as gold.
Silver has a strong tradition of helping investors maintain stability. Because it was used for so many years as currency, many Americans today still remember the days of using silver coins. That continued familiarity works to silver’s favor.
Silver also maintains its value against paper assets such as stocks, bonds, and even the dollar. Whereas the value of the silver in a silver dollar used to be a dollar, today it’s over $12.50. Compare that to a paper dollar which has lost 96% of its value since 1913.
Silver also has some cash-like benefits in that you can invest in it nearly anonymously. While large transactions may trigger reporting requirements to the IRS, many investors acquire their silver coin by coin. While you can never remain completely anonymous, buying your silver and keeping it stored securely is a sure way to keep much of your wealth away from the prying eyes of those looking to take what’s yours.
The advantages of silver are numerous, but the best way to find out for yourself is to take the plunge and invest in silver. Silver is a good investment because of these numerous advantages, and with a silver IRA you can help protect your hard-earned investments and keep them safe no matter what happens to the economy.
Investing in silver through a silver IRA is a proven way of protecting wealth. With the ability to use pre-tax dollars to invest in silver, to roll over existing retirement savings into a silver IRA, and to defer taxation on gains until you decide to take a distribution, a silver IRA can be just the ticket to help grow your wealth and protect your hard-earned investments. Talk to the experts at Goldco today to see how a silver IRA can help you achieve your retirement dreams.